Eternal’s latest performance marks a pivotal point in its corporate evolution—a testament to the power of strategic market-share acquisition in India’s fast-evolving quick commerce (QCom) and online food delivery sectors. With robust revenue expansion propelled by Blinkit’s outsized growth, and despite margin headwinds due to aggressive customer and infrastructure investments, Eternal positions itself as a formidable force in the industry’s ‘landgrab’ phase. While food delivery growth appears muted, operational levers suggest profitability will strengthen in coming quarters.

Accelerated Momentum in QCom: Chasing Scale over Margins

Eternal’s Quick Commerce division continues to outpace expectations, registering 137% year-on-year NOV growth and prompting a marked upward revision to growth forecasts. The engine behind this momentum? A dynamic pivot toward an owned inventory model, coupled with bold investments to expand its store network and reinforce customer acquisition. The most recent quarter saw 272 new stores added—raising the total to 1,816—with management now projecting an ambitious 2,100 stores by December 2025 and 3,000 by March 2027.
However, this rapid expansion and intensified marketing campaign inevitably weighed on EBITDA margins. Despite a 50 basis points sequential improvement to -1.3%, the market—guided by earlier bullish margin signals from management—had anticipated stronger operational leverage. Marketing expenditures led to 4 million additional quarterly active users, pushing the MTU base to 20.8 million—a strategic move to consolidate long-term dominance in a ‘landgrab’ environment.

Blinkit stands out against industry peers, leveraging its superior unit economics and a robust balance sheet, positioning Eternal to outcompete less-capitalized rivals as India’s QCom sector matures.

Subdued Food Delivery Growth—But Margin Leverage Emerges

The food delivery segment presents a more measured narrative, undershooting the company’s 20% long-term growth aspiration with a modest 14% YoY NOV increase. This moderation reflects broader headwinds—from soft discretionary consumer spending and QCom’s cannibalization to erratic weather disruptions. Still, signs of operational discipline abound: EBITDA margin in food delivery improved to 5.3% of NOV, up from 5.0% in the prior quarter, driven chiefly by higher platform fees.
The business enters a crucial consolidation phase. While volume growth may remain modest, the existing scale creates levers—cost optimization, platform monetization, and incremental platform fee hikes—for sustained margin improvement. Eternal’s management appears to be striking a pragmatic balance, extracting value from existing customer flows even as it nurtures new verticals.

Financial Results and Valuation—Growth Adjustments and Strategic Takeaways

Reflecting QCom’s outsized expansion, FY27E and FY28E EBITDA forecasts have been revised upwards by 9.3% and 6.7% respectively. Eternal now guides to an FY28 target price of Rs430—an increase of nearly 48% from prior estimates. This upward re-rating is underpinned by robust long-term QCom prospects and structural advantages over the competition.
Yet, with Eternal trading at 50x FY28E EV/EBITDA, the investment case is not without caveats. The company remains in a phase of suboptimal profitability as it sacrifices near-term margins for strategic scale. That said, with a net-debt position of -Rs171,654 million in FY26E, Eternal’s balance sheet provides it flexibility to ride out prolonged investment cycles without capital constraints.

A summary of key financial highlights:

Other notable statistics include a 52-week high of Rs368, a 52-week low of Rs190, and a market capitalization of Rs3,357 billion (USD 38.2 billion). Free float is robust at 71.7%, aligning Eternal with international liquidity norms for large-cap Indian equities.

Shareholder Structure and Performance Review

Eternal’s ownership is highly institutionalized, with prominent shares held by Foreign Portfolio Investors (FPIs) at 39% and Mutual Funds (MFs) at 30.1%. The absence of promoter shareholding signals a matured, globally attractive investment profile, appealing to professional asset managers.
Price performance underscores broad-based investor confidence:

• 1-month absolute return: 6.3%
• 3-month return: 32.6%
• 12-month return: 26.8%
• Consistent outperformance relative to the Nifty over all comparable periods

This performance, when juxtaposed with the scale of investments and margin dilution, reveals investor faith in Eternal’s long-term market-share strategy.

Charting the Strategic Roadmap: Industry Context and Long-term Outlook

The evolution of India’s quick commerce market is transforming consumer expectations around convenience, speed, and choice. Eternal’s management recognizes that in such a landscape, early market dominance—fuelled by geographic and user-network scale—is arguably more valuable than immediate profitability. Blinkit’s rapid growth and positive unit economics create a strong foundation for eventual margin normalization as the segment matures and competitive intensity falls.
Food delivery’s consolidation signals a stabilization phase; mature unit economics and operational discipline should yield stable and expanding returns. Eternal’s ability to extract value across verticals, optimize capital allocation, and proactively manage costs will underpin its next phase of value creation.

Against a backdrop of resilient consumer demand in India’s urban centers and heightened global investor interest in India’s digitization, Eternal finds itself at the intersection of opportunity and execution risk—a combination that defines category leaders.