Blinkit powers Eternal's Q1 growth as taxes, investments weigh on profit
Eternal Ltd's June-quarter (Q1FY27) results underscored how rapidly Blinkit is reshaping the company. Revenue surged five-fold as the quick commerce business scaled aggressively, but higher
Eternal Ltd's June-quarter (Q1FY27) results underscored how rapidly Blinkit is reshaping the company. Revenue surged five-fold as the quick commerce business scaled aggressively, but higher taxes and continued spending on newer businesses kept profit growth subdued. The Gurugram-based company reported consolidated revenue of ₹20,211 crore for Q1, up 182% from a year earlier and ahead of the ₹19,947 crore average estimate of 24 analysts polled by Bloomberg. Net profit rose 5% to ₹92 crore but missed the ₹300 crore consensus estimate based on 21 analyst forecasts, as a higher tax outgo and investments in newer businesses offset stronger operating profits from food delivery, quick commerce and Hyperpure. Blinkit remained the company's largest business by revenue, contributing about 77.5% of consolidated revenue, up from 76.5% in the March quarter. Food delivery accounted for 15.3%, down from 15.8%, while Hyperpure contributed 5.1%, compared with 5.7% in the preceding quarter. Quick answers to key questions • 5 QUESTIONS 1 How did Blinkit contribute to Eternal's Q1 growth in FY27? ⌵ Blinkit significantly boosted Eternal's Q1 growth by generating a revenue surge of over si fold year-on-year, contributing about 77.5% of the company's consolidated revenue. 2 Why did Eternal's net profit for Q1FY27 miss analyst expectations? ⌵ Eternal's net profit for Q1FY27 rose 5% to ₹92 crore, which fell short of the ₹300 crore consensus estimate due to higher tax expenses and continued investments in newer businesses. 3 What strategies is Eternal undertaking for long-term growth in the quick commerce sector? ⌵ Eternal is focusing on assortment expansion, geographical expansion, and demand densification to drive long-term growth in its quick commerce business.
4 How has competition affected Blinkit's performance in the quick commerce market? ⌵ Intense competition from players like Swiggy and Zepto has increased pressure on Blinkit, but it has maintained customer retention and continues to grow by investing in infrastructure rather than solely competing on pricing. 5 Should investors consider buying Eternal stock based on its Q1 results? ⌵ Investors are advised to be cautious; while Eternal shows strong growth potential, current valuations suggest that execution must remain ahead of expectations to justify buying at this time. Eternal's shares closed 1.15% lower at ₹283.40 on the BSE on Wednesday. Also Read | Blinkit bets on ‘Gourmet’ to woo premium shoppers Quick commerce drives growth Blinkit's revenue jumped more than si fold year-on-year to ₹15,664 crore, aided by Eternal's transition to the inventory-led (1P) model. Net order value (NOV)—the value of orders after cancellations, refunds and discounts—rose 86% to ₹17,132 crore. Adjusted Ebitda improved for the fifth consecutive quarter to 0.6% of NOV, translating into a profit of ₹102 crore versus a loss of ₹162 crore a year earlier. “We continue to focus our efforts on our three pillars of long-term growth—assortment expansion, geographical expansion, and demand densification. This quarter, we continued to make progress on assortment expansion in the top eight cities and geographic expansion in the next 30,” said Albinder Dhindsa, group chief executive officer (CEO) of Eternal, in the shareholder letter. The company said it will roll out “gourmet” stores across select locations in the top eight cities to drive premiumization through curated premium brands.
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