Will Blinkit growth sustain amid competition? 5 things to know from Eternal's shareholder letter

Eternal's first-quarter shareholder letter shows a company where the older food delivery business is producing steady cash, Blinkit is becoming the main growth engine, and new bets such as Bistro and Nugget are still in investment mode.

The company reported 54% year-on-year (YoY) growth in B2C net order value to Rs 31,120 crore in Q1FY27. Adjusted revenue rose 173% to Rs 20,648 crore, though the company said like-for-like growth was 66% because the reported number was boosted by Blinkit's shift to an inventory-led model. Consolidated adjusted EBITDA rose 223% YoY to Rs 555 crore.

Here are five key things investors need to know from the letter.

Blinkit is now the centre of the growth story

Blinkit's net order value rose 86% YoY to Rs 17,132 crore. On a sequential basis, NOV grew 19%, compared with 8% in the previous quarter. The company added 200 net new stores during Q1, taking the total store count to 2,443.


The important point is that Blinkit is no longer only a growth business burning heavy cash. Its adjusted EBITDA improved for the fifth straight quarter to 0.6% of NOV, giving it adjusted EBITDA of Rs 102 crore. A year earlier, Blinkit had posted a loss of Rs 162 crore.

Management said the growth was helped by seasonality, assortment expansion in the top eight cities and geographic expansion in the next 30 cities. It also said "gourmet" stores in select locations will add curated premium brands and support assortment expansion.

Also Read: Eternal Q1 Results: Cons PAT skyrockets 268% YoY to Rs 92 crore; revenue zooms 182%

Quick commerce needs more capital, but Eternal says returns justify it

Eternal said quick commerce is not asset-light. Blinkit now operates about 19 million sq ft of store and warehousing space across more than 300 cities. The company has invested about Rs 3,000 crore in capex over the past four years to build this network.

The company also gave a sharper framework for Blinkit's return on capital. It now assumes capex of Rs 2.5 crore per store, including warehousing, against Rs 1 crore earlier. Net working capital is estimated at 12 days of NOV, or 3.3%, compared with 18 days earlier. Average NOV per day per store is estimated at Rs 11 lakh, higher than the earlier assumption of Rs 7 lakh.

Based on these assumptions, the company said a 4% EBIT margin can imply a pre-tax ROCE of 41.7%. This is the main argument Eternal is making for continued investment in Blinkit's dark stores, warehousing and inventory.

Food delivery remains the profit anchor

Food delivery NOV rose 20% YoY to Rs 10,769 crore, after four straight quarters of acceleration. Adjusted EBITDA margin improved to 5.6% of NOV, producing Rs 606 crore of adjusted EBITDA, up 34% from a year earlier.

This is important because food delivery is the most mature business in the portfolio. The company said margins are now close to the upper end of its steady-state guidance of 5-6% of NOV.

Founder Deepinder Goyal said the company does not see a trade-off between growth and margin at this stage. He said food delivery is growing because the product is getting better, not because the company is buying growth through spending. He added that if the company has to spend margin to grow in the future, it will do so.

Competition is high, but Eternal says retention is holding

The shareholder letter also addressed competition from platforms such as Toing and Ownly. Eternal said the impact has been limited because these platforms offer similar restaurants and delivery times, with lower menu prices funded by lower commissions and delivery fees.

The company said customer retention remains the most important signal. It said average Q4 retention across cohorts is 46%, while the most recent completed cohort is at 50%. Q8 retention stands at 48% and Q12 retention at 49%. More importantly, Q12 NOV retention at 279%. This means older customer cohorts are spending nearly three times more than they did in their first quarter.

On quick commerce, management said competition remains high but has become more predictable. It said Eternal is investing in assortment depth, geographic expansion and supply-chain infrastructure, while many competitors remain focused on pricing.

New bets are small but losses are rising

Eternal's going-out business, District, had a strong quarter. NOV rose 60% YoY to Rs 3,218 crore. Adjusted EBITDA loss narrowed to Rs 65 crore, or 2% of NOV. Management said the growth was not just because of IPL seasonality and was helped by District becoming a unified app across restaurants, movies, events and activities.

Hyperpure also moved into profit. Revenue grew 27% like-for-like to Rs 1,034 crore, while adjusted EBITDA stood at Rs 6 crore, compared with a loss of Rs 18 crore a year earlier.

The "Others" segment is where losses widened. This includes Bistro, Nugget, Greening India and community initiatives such as Blinkit ambulance service and Feeding India. Adjusted revenue rose to Rs 95 crore from Rs 4 crore a year earlier, but adjusted EBITDA loss increased to Rs 94 crore from Rs 45 crore.

Management said the higher loss was mainly due to R&D investments in Nugget as the company scales its AI product capabilities. It described this segment as the cost of experimentation and said it will shut down ideas that do not show promise within a reasonable time.

Eternal ended the quarter with a cash balance of Rs 18,288 crore, up Rs 316 crore from the previous quarter. For investors, the letter shows a clear split: food delivery is profitable and steady, Blinkit is scaling fast with improving margins, and the next set of bets is still being built.

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