Eternal Q1 Profit Nearly Triples To ₹92 Cr Despite Sequential Decline

A ₹60B Vote of Confidence

Eternal's Q1 profit report is a testament to the company's growth trajectory, despite the sequential decline. The report highlights the company's ability to adapt to changing market conditions and its commitment to investing in its business. The sharp YoY jump in profit is largely driven by Blinkit's transition to an inventory-led business model, which recognizes the gross value of goods sold as revenue instead of only commissions. This move has enabled Blinkit to tap into the growing demand for quick commerce and has resulted in a significant increase in revenue. However, the company's profit declined 47% sequentially from ₹174 Cr, which is a cause for concern. The decline in profit is largely due to the increase in total expenses, which rose to ₹20,314 Cr during the quarter. The company's tax expenses also increased to ₹180 Cr, which further contributed to the decline in profit. Despite the decline in profit, Eternal's B2B arm, Hyperpure, reported revenue of ₹1,034 Cr and operating profit of ₹14 Cr. While reported revenue declined 55% YoY due to changes in business mix, the company said its like-for-like revenue grew 27% during the quarter. District, Eternal's going-out business, posted a 54% YoY increase in revenue to ₹318 Cr, while its loss increased to ₹61 Cr from ₹48 Cr in the year-ago quarter. The increase in loss was largely driven by R&D investments in Nugget as the company scales its AI product capabilities. Separately, Eternal's board approved an internal restructuring of its AI business. As part of the exercise, Nugget will be transferred to its wholly owned subsidiary Carthero Technologies Pvt Ltd through a slump sale for ₹35 Cr. Eternal launched Nugget, an AI-native, no-code customer support platform to provide AI agents ranging from conversational AI chatbots to co-pilots, in February 2025. Its turnover for FY26 stood at ₹7.6 Cr. Besides Nugget, Eternal is also consolidating its community initiatives, Blinkit Ambulance Service and Feeding India into a wholly owned section 8 (not for profit) subsidiary, Eternal General Services Foundation. The company's focus on Bistro, its quick food delivery platform, is also a positive development. Goyal described Bistro as the company's answer to the low-ticket food delivery segment. The company is redesigning kitchen operations, automation and supply chain infrastructure to improve freshness, speed and consistency. Eternal reiterated that it will continue investing aggressively in Blinkit's expansion despite the capital-intensive nature of the business. CFO Akshant Goyal said the company has invested about ₹3,000 Cr in capital expenditure over the past four years to build Blinkit's network of stores and warehouses, adding that the investments will continue as long as they generate healthy returns. He added that Blinkit's inventory-led model, while requiring higher working capital, makes the business more durable over the long term. Notably, ecommerce giants Flipkart and Amazon have stepped up investments to scale their quick commerce platforms, further increasing the competition in the segment, where Blinkit competes with Instamart and Zepto, over the past few quarters. Blinkit also disclosed that inventory losses, including expiry, shrinkage, damage, loss in transit and pilferage, currently account for about 1.8% of its net order value (NOV). Blinkit's NOV grew 86% YoY to ₹17,132 Cr during the quarter, while it added 200 net new stores, taking its network to 2,443 stores. District registered a 60% YoY jump in its NOV to ₹3,218 Cr. While IPL matches contributed to activity during the period, Deepinder Goyal said the strong growth was not a seasonality-driven spike. 'The acceleration is real, driven by the platform coming together as a unified multi-use-case app and the compounding effects of that breadth on customer engagement and frequency,' he said. According to the company, District now generates business for more than 45,000 restaurants, 5,000 movie screens, 6,000 retail stores, 7,500 live events and over 2,000 activity outlets across India.