Blinkit made an operating profit in the middle of India’s toughest quick-commerce price war, yet Eternal’s headline profit came in at about half of what analysts expected.
For the past two years, one question has shaped how investors value Eternal: can Blinkit, its ten-minute delivery business, ever make money? The July–September results answer it. Blinkit reported an adjusted operating profit of ₹184 crore, compared with a loss of ₹156 crore in the same quarter last year.
That turnaround came in difficult conditions. Amazon has entered quick commerce, Swiggy’s Instamart and Zepto are spending heavily to win customers, and Blinkit opened 308 new dark stores in the quarter alone, taking its network to 2,751. New stores lose money before they mature, so adding that many while still turning a profit is significant. Blinkit’s net order value, the value of goods customers bought, grew 79.3% to ₹20,940 crore. Its operating margin was only 0.9% of that, but it has improved for six straight quarters.
The market’s reaction was cooler because of the group’s headline profit. Eternal’s consolidated net profit nearly doubled to ₹125 crore from ₹65 crore, but analysts had expected roughly ₹250 crore to ₹300 crore.
The explanation is tax. For years, Eternal piled up losses that it could offset against future profits, which kept its tax bill close to zero. As the business has become consistently profitable, those offsets have largely been used up. The effective tax rate this quarter was about 61%, more than double the normal corporate rate. That sounds bad but reflects progress: a company only runs out of loss offsets when it starts making real money. The practical effect is that reported profit will understate how the business is doing for a few quarters, until the tax rate settles.
Revenue also needs careful reading. It rose 78% to ₹24,138 crore, which looks dramatic. But much of that comes from a change in how Blinkit operates. Last year it moved to an inventory model, buying goods and selling them directly instead of only charging a commission to sellers. Under that model, the full value of goods counts as revenue, which inflates the figure compared with the old approach. A better gauge of underlying progress is adjusted EBITDA, which rose 197% to ₹666 crore and 20% from the previous quarter. That was still below analyst forecasts, but it shows the operating business is improving quickly.
The part of Eternal that gets the least attention is the one paying for the expansion. Zomato’s food delivery business grew order value 21.5% to ₹11,445 crore, its fifth straight quarter of faster growth, and its operating profit rose 25% to ₹627 crore. That is more than three times what Blinkit earned. In practice, the mature food delivery business is generating the cash that funds Blinkit’s store build-out. Smaller ventures are still minor. Bistro, the fast food service, and Nugget, the customer-support software arm, together generated ₹132 crore, and the company announced a restructuring of District, its going-out business.
The bigger strategic choice is how fast to keep expanding. Eternal plans to take Blinkit from 2,751 stores to more than 3,500 by March 2027 and 5,000 by March 2028, nearly doubling the network in 18 months. Each new store adds rent, staff and inventory costs before it reaches enough orders to pay for itself. That will keep Blinkit’s margins thin even as the business grows.
For investors, the takeaway is to choose the right measure. Judged on quarterly profit, Eternal will look disappointing for some time, because of both the tax change and heavy store spending. Judged on order growth, store maturity and steady margin improvement, the strategy is working. Blinkit has now shown it can make money at its current scale. What remains to be seen is how much profit the company is prepared to give up to expand quickly while competitors are still spending heavily.
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