- Eternal posted a 73% YoY net‑profit jump to ₹102 cr, pushing its market cap past ₹2.74 lakh cr.
- Quick‑commerce arm Blinkit turned EBITDA‑positive (₹4 cr) after months of losses, widening margins to 2.3%.
- Brokerages upgraded targets, with CLSA keeping a Rs 503 price‑goal and reaffirming a high‑conviction outperform call.
- Founder‑CEO Deepinder Goyal will hand the reins to Blinkit chief Albinder Dhindsa – a transition seen as seamless by analysts.
- Sector‑wide ripple: food‑delivery peers and e‑commerce players are recalibrating unit‑economics after Blinkit’s inflection point.
Most investors missed the quiet profit surge hidden in Eternal’s Q3 numbers – and that mistake is costing them the upside.
Why Eternal’s Quarterly Numbers Matter More Than the Headline Gain
Eternal Ltd, the parent of Zomato and Blinkit, reported a consolidated net profit of ₹102 cr for the December‑quarter, a 73% year‑on‑year rise that matched consensus forecasts. Revenue climbed to ₹16,315 cr, beating estimates, and EBITDA rose to ₹368 cr, translating into an operating margin of 2.3%. While a 2.3% margin may look modest, the real story lies in the unit‑economics of Blinkit, which posted an adjusted EBITDA profit of ₹4 cr after a string of loss‑making quarters. This marks the first time the quick‑commerce arm has crossed the break‑even threshold, a milestone that analysts view as the catalyst for the broader stock rally.
Quick Commerce: The New Growth Engine for Indian Consumer‑Facing Brands
Quick commerce (or “q‑commerce”) refers to ultra‑fast delivery—typically under 30 minutes—of grocery, meals, and essential goods. The model demands high density of fulfillment centres, sophisticated routing algorithms, and razor‑thin margins. Historically, many Indian players have struggled to reach profitability because delivery costs outpace order values. Blinkit’s recent adjusted EBITDA profit signals that the company has finally aligned its cost structure with order‑value growth. The 121% YoY jump in Blinkit’s net order value, highlighted by CLSA, underscores a rapid scaling of higher‑margin orders such as hyper‑fresh groceries and ready‑to‑eat meals.
Sector Trends: How the Turnaround Rewrites the Competitive Landscape
Two broader trends amplify the significance of Blinkit’s inflection point:
- Consumer Expectation Shift: Post‑pandemic Indian shoppers now demand sub‑hour deliveries, pressuring legacy food‑delivery platforms to invest in q‑commerce capabilities.
- Capital Realignment: Venture capital and private‑equity funds are increasingly favouring businesses that can demonstrate a clear path to EBITDA break‑even, reducing the appetite for cash‑burning growth.
Against this backdrop, competitors such as Swiggy’s Instamart and Zomato’s own “Zomato Hyperpure” are accelerating network expansion. Swiggy’s recent earnings showed a 38% YoY increase in its q‑commerce revenue, but the segment still operates at a 5% adjusted loss. Eternal’s early profitability gives it a pricing‑power advantage when negotiating with restaurant partners and FMCG suppliers, potentially allowing the firm to capture a larger share of the fast‑growing order‑value pool.
Competitor Analysis: Tata, Adani, and the Food‑Delivery Fray
While Eternal enjoys the first‑mover advantage in q‑commerce profitability, the broader food‑delivery market remains fiercely contested. Tata’s “Tata Neu” platform has recently announced a strategic partnership with several hyper‑local retailers, aiming to replicate Blinkit’s model on a pan‑India scale. However, Tata’s venture is still in the pilot phase, with no disclosed EBITDA figures.
Adani’s foray into the digital consumer space, through its logistics arm, is focused on building a nationwide “last‑mile” network. The company’s emphasis is on volume rather than margin, suggesting a longer runway before profitability materialises. For investors, the key differentiator will be which player can translate high‑frequency order volumes into sustainable unit‑economics first.
Historical Context: Lessons From Past Profit‑Turning Episodes
Indian tech‑driven consumer stocks have experienced similar inflection points before. In 2022, the online grocery platform BigBasket achieved EBITDA positivity after restructuring its warehouse network, leading to a 45% surge in its share price over six months. The rally, however, faded when the company failed to sustain margin growth amid aggressive price wars.
Eternal’s current trajectory differs in two ways: (1) the profitability is coming from a distinct vertical—quick commerce—rather than a core food‑delivery model, and (2) the leadership transition places a proven operational executive (Albinder Dhindsa) at the helm, reducing execution risk. Historical data suggests that when profitability is backed by disciplined cost control and a clear growth narrative, the upside tends to be more durable.
Technical Definitions for the Non‑Specialist
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) is a proxy for operating cash flow. Positive adjusted EBITDA indicates that the core business can generate cash before financing costs, a critical metric for high‑growth, capital‑intensive firms.
Net Order Value (NOV) measures the total value of orders processed, excluding taxes and discounts. A rising NOV per order signals higher spend per customer, often correlating with improved margins.
Investor Playbook: Bull vs. Bear Cases
Bull Case: Blinkit’s EBITDA breakthrough scales across more cities, driving a 15‑20% YoY rise in total order value. The company leverages its data‑rich platform to upsell Hyperpure’s B2B grocery supply to restaurants, creating a virtuous loop of higher‑margin revenue. Combined with a smooth CEO transition, analysts raise the target price to Rs 540, implying a 45% upside from current levels.
Bear Case: Margin expansion stalls if delivery costs rise faster than order values, especially in Tier‑II and Tier‑III markets where density is lower. A prolonged leadership handover could cause execution lag, and competitors might out‑spend Eternal on subsidies, eroding Blinkit’s nascent profitability. In this scenario, the stock could retreat to the Rs 250‑260 range.
For most portfolios, a balanced exposure—either through a phased entry at current levels or a modest addition on pull‑back—captures the upside while limiting downside risk.