Eternal Ltd — Q4 FY25 earnings call

Call held 1 May 2025

Management summary

Eternal's Q4 FY25 was marked by sustained Blinkit expansion amid peak competitive intensity across real estate, marketing, and last-mile costs. Food delivery growth decelerated to 16% YoY as the company shut down experiments like Zomato Quick and Everyday that failed to move the needle. Management maintained 20% as a long-term (4-5 year) CAGR target for food delivery. The company flagged next-day delivery platforms (Amazon, Flipkart) as emerging competition, with same-day 4-6 hour delivery narrowing the gap with quick commerce.

Highlights

  • Blinkit added ~300 dark stores in the quarter, continuing aggressive expansion

  • Blinkit Adjusted EBITDA margin at -2% of NOV; contribution margin flat QoQ despite competition

  • FY25 food delivery NOV/GOV grew 20%+ despite Q4 growth slowing to 16% YoY

  • Blinkit ad income exceeded 4% of GOV; customer fees approximately 3% of GOV

  • Blinkit market share maintained despite intensifying competition from multiple players

  • Shut down Zomato Everyday and Zomato Quick experiments in food delivery

  • Going-out (District) GOV grew 100%+ YoY with Adj EBITDA margin at -2% to -2.5%

  • Other income rose to INR 368 crore from INR 252 crore due to full-quarter QIP impact

Concerns

  • Competition across all vectors - real estate, marketing, delivery costs, pricing

  • Food delivery unable to crack growth vectors - affordability, assortment, delivery times

Key financials

  1. Food Delivery NOV Growth YoY 16%
  2. Blinkit Adj EBITDA Margin (NOV) -2%
  3. Blinkit Ad Income (% of GOV) 4%
  4. Going-Out GOV Growth YoY 100%
  5. Going-Out Adj EBITDA Margin -2.3%
  6. Other Income ₹368 Cr
  7. Others Segment Losses ₹16 Cr
  8. Blinkit Working Capital (illustrative) ₹1,000 Cr

What they filed

Q1 FY27: revenue up 182.0%, net profit up 268.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,799 5,405 5,833 7,167 13,590 +183%16,315 +202%17,292 +196%20,211 +182%
EBITDA226 162 72 115 239 +6%368 +127%486 +575%594 +417%
Net profit176 59 39 25 65 −63%102 +73%174 +346%92 +268%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Blinkit (Quick Commerce)
    -2% Adj EBITDA Margin (NOV)300 stores Stores Added in Quarter4% Ad Income as % of GOV
  • Food Delivery
    16% NOV Growth YoY
  • Going Out (District)
    100% GOV Growth YoY-2.3% Adj EBITDA Margin
  • Others (Bistro, Nugget, B2B)
    ₹16 Cr Segment Loss

Guidance & targets

Food Delivery

  • Long-term NOV Growth CAGR Food Delivery · 4-5 years · Medium confidence 20% over 4-5 years
    20%, therefore, is more a long-term 4-5 year CAGR guidance. I'm just clarifying that even in the past, we have stated that it's not an immediate every year growth guidance.

    — Akshant Goyal

  • Delivery Time Reduction Food Delivery · Medium term · Medium confidence Average 30 min down to 20-25 min over time

    From 30 minutes average today

    we should try and bring that 30 minutes down to maybe 20-25 minutes over time by making our overall logistic fleet delivery system more efficient

    — Akshant Goyal

Going Out

  • Losses Outlook Going Out · FY26 · High confidence Investment phase to continue for next year; losses range-bound
    that investment phase will continue for the next year or so. And hence, we are not expecting this business to become profitable in that time frame. But at the same time, we don't expect that losses will go up from here

    — Akshant Goyal

Quick Commerce

  • Inventory Model Transition Working Capital Quick Commerce · Near term · High confidence ~INR 1,000 crore (~15 days working capital)
    More or less, yes

    — Akshant Goyal

Risks & concerns

  • Competition across all vectors - real estate, marketing, delivery costs, pricing

    high

    Management noted competition hasn't reduced, with price action, real estate competition, marketing and incentive costs all at peak levels. Every part of the business becomes more expensive.

    Both acknowledged

  • Food delivery unable to crack growth vectors - affordability, assortment, delivery times

    high

    Akshant explicitly said 'we've not been able to actually make a meaningful dent on these three vectors despite us trying multiple things in the last one or two years'

    Management acknowledged

  • Next-day delivery platforms (Amazon, Flipkart) shrinking delivery times to 4-6 hours

    medium

    Management proactively flagged this as an emerging competitive threat to quick commerce

    Management acknowledged

  • Delivery partner supply crunch impacting food delivery growth

    medium

    Rapid e-commerce expansion compounded seasonal summer supply crunch. Management expects supply to catch up but acknowledges temporary constraint.

    Both downplayed

  • Rapido's subscription-based food delivery model potentially disrupting commission model

    low

    Management said they're not clear how the model can work for all stakeholders; will wait and watch

    Analyst downplayed

Areas of evasion (3)

  • Last-mile delivery cost increases
  • City-level expansion data
  • Hyperpure working capital breakdown

Q&A highlights

3 direct
Competition intensity peak and margin impact on Blinkit Direct
The impact of competition is visible in the lack of significant margin expansion that we would have otherwise expected.

Explains why Blinkit margins have stagnated despite store maturation - competition is the primary headwind absorbing natural margin improvement

Asked by Manish Adukia (Goldman Sachs)

Food delivery 20% growth reframed as long-term CAGR, not annual target Direct
20%, therefore, is more a long-term 4-5 year CAGR guidance. I'm just clarifying that even in the past, we have stated that it's not an immediate every year growth guidance.

Significant downward revision in near-term growth expectations; management admitting they haven't cracked affordability, assortment, or delivery time vectors

Asked by Manish Adukia (Goldman Sachs)

Next-day delivery platforms as emerging quick commerce competition Direct
on Amazon, Flipkart, now you can see a lot of products actually get delivered on the same day in four to six hours. So, that is also in some ways going to compete with the quick commerce business

New competitive threat dimension beyond existing QC players; horizontal e-commerce platforms compressing delivery times toward quick commerce territory

Asked by Abhisek Banerjee (ICICI)

1 min read 4 chapters

Detailed narrative

Competition at Peak Intensity Across All Dimensions

Management described competition as elevated across every dimension: real estate costs for dark stores, marketing spend, delivery partner incentives, and customer discounts. The impact manifests in lack of margin expansion rather than market share loss. Blinkit maintained its market share but at the cost of profitability improvement, with Adj EBITDA stuck at -2% of NOV when it could have been profitable absent competition.

Food Delivery Growth Trajectory Concerns

Food delivery growth decelerated to 16% YoY in Q4 FY25 despite FY25 full-year NOV/GOV growing 20%+. Management explicitly acknowledged failure to make meaningful progress on affordability, assortment, and delivery time vectors despite trying multiple approaches over 1-2 years. The 20% growth target was clarified as a 4-5 year CAGR rather than annual guidance. Zomato Quick (10-minute delivery) and Zomato Everyday (daily meals) were both shut down.

Strategic Differentiation: No Private Labels, No Megapods

Blinkit explicitly rejected private labels (preferring to operate as a platform), MAX saver/super saver equivalents, and megapod formats adopted by competitors. Management said they don't see value in these from a customer perspective. This represents a clear strategic divergence from Swiggy Instamart and Zepto approaches.

Emerging Competitive Threat from Horizontal E-commerce

Management proactively flagged Amazon and Flipkart's shrinking delivery times (4-6 hours same-day) as an emerging competitive threat to quick commerce. This represents a new dimension beyond existing QC players, potentially compressing the convenience premium that justifies quick commerce's higher costs.

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