Eternal Ltd., formerly known as Zomato, reported strong financial results for the first quarter of FY27, with Blinkit becoming the company’s biggest growth driver. The quick commerce platform posted its first major operating profit, but the results also revealed the high cost of running an inventory-based business.
During the quarter, Eternal’s revenue from operations rose 182% year-on-year to Rs 20,211 crore. Adjusted revenue stood at Rs 20,648 crore, although the company said the actual growth was 66% after removing the impact of accounting changes. The company’s adjusted EBITDA reached a record Rs 555 crore, while total B2C Net Order Value (NOV) increased 54% to Rs 31,120 crore.
Eternal reported a consolidated net profit of Rs 92 crore. This was lower than the previous quarter mainly because the company’s tax expense increased sharply as it started paying more taxes after using up earlier business losses. The company also ended the quarter with more than Rs 18,000 crore in cash, giving it enough funds for future expansion.
Blinkit Records Strong Growth and Turns Profitable
Blinkit had one of its best quarters since becoming part of Eternal. The company reported an adjusted EBITDA profit of Rs 102 crore compared to a loss of Rs 162 crore in the same quarter last year. Its adjusted EBITDA margin also improved to a positive 0.6%.
The platform’s Net Order Value grew 86% year-on-year to Rs 17,132 crore. Blinkit is now Eternal’s biggest consumer business, contributing around 55% of the group’s total B2C Net Order Value.
Customer activity also increased rapidly. Monthly transacting customers reached 31.8 million, almost double compared to last year. Total orders rose 87% to 331 million. At the same time, the average Net Order Value per store per day increased 13% to Rs 8.27 lakh, showing that existing stores are becoming more productive.
Blinkit’s reported revenue jumped 553% year-on-year to Rs 15,664 crore. However, this huge increase does not mean the business grew five times in real terms.
Earlier, Blinkit mainly worked as a marketplace where it earned commissions from third-party sellers. Now, the company follows an inventory-led model, where it buys products directly, stores them and sells them to customers itself.
Because Blinkit now owns the products, it records the full selling price of every order as revenue instead of only the commission. This accounting change made the reported revenue much higher. After removing this accounting impact, Blinkit’s actual revenue growth was 117%, which still shows very strong business growth.
Rs 308 Crore Lost Due to Spoiled Inventory
While Blinkit’s profit attracted attention, another figure from the company’s shareholder update has become equally important.
Management said Blinkit loses around 1.8% of its Net Order Value because of spoiled fruits and vegetables, damaged products, theft and losses during transportation.
Based on Blinkit’s quarterly Net Order Value of Rs 17,132 crore, this works out to an estimated loss of about Rs 308 crore.
This amount is almost three times higher than Blinkit’s adjusted EBITDA profit of Rs 102 crore. However, the inventory loss is already included under the cost of goods sold before operating profit is calculated. In simple words, Blinkit’s reported profit is what remained after absorbing these inventory losses.
The disclosure also shows one of the biggest challenges of the inventory-led business model. While owning inventory helps Blinkit control product quality, pricing and delivery speed, it also means the company has to bear the cost of damaged and unsold products.
The company also noted that this 1.8% inventory loss figure is not separately shown in its audited financial statements, making it difficult for investors to compare it with previous quarters.
Expansion Continues as Investment Requirements Increase
Blinkit continued expanding its network during the quarter by adding 200 new dark stores. This took its total store count to 2,443 across India.
At the same time, opening new stores has become much more expensive. According to management, the cost of setting up one store, including its share of warehouse infrastructure, has increased from around Rs 1 crore to Rs 2.5 crore. Bigger stores, a wider product range and improved warehouse technology have pushed up investment costs.
The company now has Rs 2,545 crore invested in inventory and working capital, equal to around 14 days of annualised Net Order Value. Across all businesses, Eternal operates nearly 19 million square feet of warehouse and store space in more than 300 cities after investing around Rs 3,000 crore over the past four years.
Looking ahead, the company expects mature Blinkit stores to generate average daily sales of Rs 11 lakh and achieve an EBIT margin of 4%, much higher than the current EBITDA margin of 0.6%. Blinkit also plans to open premium gourmet stores in selected cities to increase customer spending.
Meanwhile, Eternal’s food delivery business remained the company’s biggest profit generator, reporting adjusted EBITDA of Rs 606 crore. Hyperpure also became profitable during the quarter, while the Going-out business reduced its losses. The company’s newer businesses, including Bistro, Nugget AI and other experimental projects, reported higher losses as Eternal continued investing in future growth.