ETERNAL Q1FY26 Earnings Call: Blinkit Reports Strong Growth, Plans Inventory Ownership Shift
The announcement provides Q1FY26 performance insights, strategic shifts (Blinkit's 1P model), and future growth outlooks for both core businesses, which are critical for investor evaluation and company trajectory.
The announcement highlights strong growth in the quick commerce segment, significant margin improvement for Blinkit, and a positive outlook for food delivery growth, which has bottomed out. The strategic shift to 1P inventory ownership is also seen as beneficial for margins and operations.
ETERNAL LIMITED released the transcript of its Q1FY26 earnings conference call, conducted on 21 July 2025, providing updates on its quick commerce (Blinkit) and food delivery businesses:
* Quick Commerce (Blinkit): The business showed strong growth, primarily from existing polygons and cities like Delhi, which recorded a 70% year-on-year growth. Less than 5% of the overall growth came from new expansion areas. The company plans to transition most of its business to a 1P (inventory ownership) model within the next two to three quarters, expecting margin accretion and improved operational metrics. Quick commerce margins improved from -2.4% to -1.8% in Q1FY26, with expectations for continued improvement if competitive intensity remains stable. Parts of the business are already achieving a 2.5% Adjusted EBITDA margin. The company has visibility for 3,000 dark stores and expects strong growth momentum for the next two years as infrastructure is built out. Average order value (AOV) continues to rise over the longer term. * Food Delivery: Monthly Transacting Customer (MTC) growth is back in sync with Net Order Value (NOV) growth and is expected to continue. Year-on-year NOV growth has bottomed out at 13% (compared to 27% in the same quarter last year), with early signs like better app opens and resurrection rates indicating improved growth ahead. The company does not expect significant increases in "going-out" business losses, projecting them to remain range-bound. The focus remains on increasing utilization of delivery partners and log-in hours rather than just the number of partners. * Management Commentary: The management stated they would react to competitive circumstances to maintain leadership in quick commerce. They are not keen on exploring longer delivery time segments (e.g., 30-40 minutes) as they do not see the opportunity there. While long-term margin expansion is possible for food delivery, the near-term focus is on growth, so margins could remain around current levels. The company did not provide specific breakeven timelines for quick commerce, citing it as a function of mature vs. new store performance and expansion speed.
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ETERNAL LIMITED filed this with the NSE as a statutory disclosure, categorised under results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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