Eternal Results Analysis: Blinkit Drives Growth, Margins Key to Profitability

Eternal (formerly Zomato) reported a sharp jump in its headline numbers this quarter. Adjusted revenue came in at ₹17,680 crore, growing 186% year-on-year, while Adjusted EBITDA stood at ₹429 crore, up 160% YoY. At first glance, this looks like a breakout quarter, signalling strong growth across businesses and improving profitability.

But once you move beyond the surface, the story becomes more nuanced. The growth is real, but not all of it reflects underlying business performance. A significant part of the jump is driven by a structural shift in how the company reports revenue.

The 186% Growth Needs Context

Eternal has transitioned Blinkit from a marketplace model to an inventory-led model. Earlier, the company only recorded commissions as revenue. Now, it records the full value of goods sold. This accounting change significantly inflates reported revenue, even though the underlying business activity may not have increased at the same pace.

To make the numbers comparable, the company has also shared an adjusted view of growth. After removing the impact of this accounting change, LFL revenue growth comes down to around 64% YoY.

This is still strong and reflects genuine business expansion, but it is far more realistic than the headline number. The key takeaway is that part of the reported growth is accounting-driven, while the rest reflects actual operational performance.

Blinkit Is Driving Revenue Expansion

Blinkit is clearly the biggest contributor to Eternal’s revenue surge this quarter. Adjusted revenue from the quick commerce segment stood at ₹13,232 crore, reflecting a massive 674% year-on-year growth.

But this number is heavily influenced by the shift to the inventory-led model, where the company now records the full value of goods sold instead of just commissions.

To get a clearer picture of underlying performance, the company also provides an adjusted view. On a like-for-like basis, Blinkit’s adjusted revenue growth was 126% YoY.

This is the number that truly reflects business expansion. Even after removing the accounting impact, growth remains extremely strong, indicating rapid scaling of the quick commerce business.

Alongside this, Blinkit continues to expand aggressively through store additions and deeper penetration across cities, which is supporting this momentum.

There are also early signs of improving profitability. Blinkit reported an Adjusted EBITDA of ₹37 crore this quarter, up from ₹4 crore in the previous quarter. However, this translates to a margin of just around 0.3%, which remains extremely thin.

This clearly shows that Blinkit is still in a heavy investment phase. The company is prioritising expansion, customer acquisition, and infrastructure build-out over near-term profitability. The strategy is simple. Build scale first, and let margins improve gradually as the business matures.

Food Delivery Is Still the Core Profit Engine

While Blinkit is driving growth, the food delivery business remains the most stable and profitable part of Eternal’s portfolio. The segment reported an Adjusted EBITDA of ₹532 crore this quarter, with margins at 5.5%. This is significantly higher than Blinkit’s margin of around 0.3%, highlighting the maturity and profitability of the food delivery business.

The segment also delivered steady growth, with adjusted revenue increasing to ₹3,125 crore, up around 30% year-on-year. This shows that even as the business matures, it continues to expand at a healthy pace.

The company has made deliberate strategic changes to widen its user base by targeting more price-sensitive consumers. This includes lowering minimum order values to ₹99 for Gold users and promoting affordable meal options below ₹250.

As a result, average order values have declined, but order volumes have increased. Importantly, despite this shift towards lower-value orders, margins have remained stable in the 5–6% range. This stability indicates strong operational efficiency and cost control. In effect, food delivery is generating consistent profits that are helping fund Blinkit’s aggressive expansion.

District and Hyperpure: Smaller but Improving

The District business, which focuses on going-out and entertainment, is showing signs of improvement but remains loss-making. Adjusted EBITDA losses reduced to ₹81 crore from ₹121 crore in the previous quarter, and margins improved to -3.0% from -4.7%.

However, this segment is inherently volatile. Performance depends on event cycles, seasonal demand, and external factors, making quarterly trends less predictable. It remains a long-term bet rather than a near-term profit contributor.

Hyperpure, the B2B supplies business, is quietly stabilising. It reported an Adjusted EBITDA of ₹5 crore with a margin of around 0.5%, improving from the previous quarter. While not a major growth driver, it plays an important role in strengthening the supply chain and supporting the broader ecosystem.

Margins Tell the Real Story

Looking at margins across segments gives a much clearer picture of Eternal’s business than revenue growth alone. Food delivery operates at around 5.5% EBITDA margin, Blinkit is at approximately 0.3%, District is still negative at -3.0%, and Hyperpure is close to breakeven at 0.5%.

Management has also made it clear that the focus is on absolute EBITDA rather than margin percentages. This means the company is willing to keep margins low in the short term to drive long-term growth.

The most critical metric to track from here is Blinkit’s margin trajectory. Management has indicated a long-term target of 5-6% EBITDA margins for the business. If Blinkit reaches this level at scale, it could significantly transform Eternal’s overall profitability profile.

What Management Is Signalling

The broader strategy is clearly tilted towards growth-first execution. Eternal believes that the heavy lifting has already been done in terms of building infrastructure, supply chains, and consumer habits. From here, the focus is on accelerating growth and scaling the platform further.

The company expects faster compounding going forward and has set an ambitious target of reaching $1 billion in Adjusted EBITDA by FY29. This reflects confidence that current investments, especially in Blinkit, will deliver strong returns once the business matures.

Key Risks to Watch

Despite strong growth, there are clear risks that could impact execution. Competition in quick commerce remains intense, which could continue to pressure margins. Aggressive expansion may delay profitability in Blinkit, especially if customer acquisition costs remain high.

Execution in newer cities and categories will also be critical. The model has worked well in top markets, but scaling it consistently across smaller cities is still a challenge. Most importantly, a large part of Eternal’s future growth depends on Blinkit successfully improving its margins.

Final Takeaway

Eternal’s Q4FY26 results look impressive on the surface, but the real story lies beneath the headline numbers. Revenue growth of 186% is partly driven by accounting changes, while the underlying growth of around 64% provides a more accurate picture of business momentum.

Blinkit is clearly driving the next phase of growth, but it is still operating at very thin margins of around 0.3%. In contrast, food delivery remains the backbone of the business, delivering stable margins of 5.5% and consistent profitability.

As the company moves forward, the focus will gradually shift from growth to profitability. The key question is not whether Eternal can scale further, but whether it can convert that scale into sustainable margins. That is where the real test of the business begins.

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