Detailed Narrative
Q4 FY26 Performance Overview
Eternal Ltd reported robust growth in Q4 FY26, with food delivery order growth at 15% YoY and quick commerce order growth 'slightly above 90%'. The company's quick commerce segment, Blinkit, achieved approximately 3% profitability. Active delivery partners also saw significant increases, with food delivery partners up 30% and quick commerce riders up 120% YoY.
Quick Commerce Growth Strategy & Outlook
Management reiterated its medium-term guidance for quick commerce, targeting a 60% CAGR over the next three years. This growth is expected to be driven by assortment expansion, geographical expansion, and demand densification in existing cities, potentially including new city entries. The company is on track to meet its target of 3,000 dark stores by March (implied 2027).
Profitability and Unit Economics
The quick commerce segment is currently operating at approximately 3% profitability, with a long-term target for contribution margin to reach 5-6%. While a slight dip in contribution per order was observed this quarter, management attributed this to seasonal factors and supply chain costs, not a change in business trajectory. The company aims to optimize for absolute profit growth rather than just margin percentage.
Competitive Landscape and Marketing Spend
Competitive intensity remains high across all markets, but management noted 'extremely low cost of customer acquisition' due to competitors pulling back on spending. Eternal Ltd continues to invest heavily in marketing for new customer acquisition, leading to strong MTU additions. The company's strategy focuses on healthy, sustainable growth rather than reacting to every competitive move.
Operational Metrics and Rider Dynamics
A discrepancy was noted between higher active delivery partner growth (30% for food, 120% for quick commerce) and lower order growth (15% for food, >90% for quick commerce). Management explained this by the increasing number of part-time riders, which boosts the total partner count but reduces orders per rider per shift. Customer retention, measured by orders per customer, saw a slight dip from 3.6 to 3.35, primarily due to the acceleration in new customer additions.
Strategic Initiatives (Bistro, Toing, Ad Monetization)
Eternal Ltd has no immediate plans to replicate Swiggy's 'Toing' model, as its problem-solving utility is unclear. Bistro remains a small, experimental project. On ad monetization, the company clarified that non-paid ads from external brands are insignificant; the primary revenue comes from brands selling on the Blinkit platform. Management does not operate with a cap on ad revenue, seeking opportunities for higher income.