More Stories

Informist, Thursday, May. 1, 2025

By Rajesh Gajra

NEW DELHI – Eternal Ltd.'s management strongly expressed its worry over the impact of recent competitive heat in the quick commerce segment Thursday arguing that competition was going to intensify further in the near term and the pressure going to remain elevated in coming quarters. Speaking with analysts and investors in a post-earnings conference call, the management of Eternal, formerly Zomato, said the competition did not reduce "in any way" in the March quarter, and on the contrary, it was more intense in terms of price action compared with the previous quarter.

The Blinkit store expansion that the company has put on in an accelerated mode in the last 3-4 quarters is a part of Eternal's strategy to retain its position in the quick commerce segment. Due to 294 new store additions in the Blinkit business in the latest quarter, up from 216 new store additions in the December quarter, the company's operating expenses have remained elevated. The segment's operating loss in the March quarter jumped substantially to INR 1.78 billion in the March quarter from an operating loss of INR 370 million in the year-ago quarter.

The company's management said the competitive pressure has led to rise in nearly all costs in the quick commerce segments. To a question on whether the new stores rollout has faced challenges such as finding stores in the right location amid inflation in rental costs, the management said, "There has been significant competition for the same real estate in most of the cities that we are in and that has led to elevated rentals."

According to the management, the impact of increased competition is visible in the lack of margin expansion in the business-to-consumer segments of the company. The adjusted earnings before interest, tax, depreciation, and amortisation margin of Eternal in the quick commerce segment was (-)1.9% in the March quarter from (-)1.3% in the December quarter and (-)0.1% in the September quarter. The company's going-out segment also saw adjusted EBITDA margin contract to (-)2.2% in the March quarter from (-)0.7% in the previous quarter, while the food delivery segment has recorded a sequential increase of only 10 basis points in adjusted EBITDA margin to 4.4%.

Had the competition not risen dramatically the company would have expected a significant margin expansion, according to Eternal's management. "There are now more players in the market and there is obviously more competition across categories to market to the same set of customers which is leading to some margin pressure," the management said.

Despite the rising competition, Eternal has maintained its market share in last few quarters. In the food delivery segment Eternal's market share has been stable for the last few months, according to the company. In quick commerce segment, the company said it was aggressively looking to grow the market share in the face of heightened competition.

Answering an analyst's query how many new Blinkit store additions were taking place in new cities, the management said the company was going into smaller cities every quarter and the share of these cities in incremental quarterly additions was increasing. In the smaller markets, the company is seeing "good customer adoption of quick commerce," the management said.

To a question on whether the food delivery segment's growing monthly transacting customers would likely be a growth vector for next couple of years, the management said the company expects this metric to continue to rise as currently there are still many customers who don't transact every month. The average monthly transacting customers rose to 13.7 million in the March quarter from 10.6 million in the previous quarter, according to the company.

On Wednesday, shares of Eternal ended 0.6% higher at INR 232.52 on the National Stock Exchange of India Ltd.  End

Edited by Akul Nishant Akhoury

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.