New Delhi: Deepinder Goyal-led Eternal Ltd has reported a 67% increase in consolidated revenue to Rs.7,563 crore from Rs.4,520 crore from Q1FY24. In a letter to its shareholders, the company explained that its food delivery Net Order Value (NOV) growth has reduced by half from 27% YoY to 13% YoY due to subdued demand. Overall, the company’s profit has declined 90% from Rs.253 crore in Q1FY25 to Rs.25 crore in this quarter.
Formerly known as Zomato, the company has rebranded to Eternal as it now wants to be seen as an umbrella company comprising of Zomato (food delivery), Blinkit (quick commerce) and District (going-out business). In May, the company became an IOCC (Indian-Owned and Controlled Company after about FIIs offloaded $1.3 billion of its shares to meet the IOCC guidelines.
The company has been the frontrunner in the food delivery space, competing with Swiggy in food delivery and Zepto, Swiggy Instamart and BigBasket in the quick commerce segment.
Despite subdued demand in food delivery, the company has recorded a 127% YoY rise in NOV for Blinkit, surpassing the quarterly NOV of Zomato for the first time.The company is rapidly investing in adding new dark stores, with an addition of 243 stores taking the total store count to 1,544 by the end of the quarter. The company aims to set up 2,000 stores by December 2025 In total, the company manages over 5.6 million sq ft of warehousing space.
Considering the fragile margins and intense competition in food delivery, Blinkit is helping Eternal grow faster with better economics.
“From our standpoint, we are keeping things simple and making sure we are investing in delivering on our promise to customers. Doing that involves solving for two large problem statements in parallel – a) building a retail business, with a leading edge just-in-time supply chain, and b) an internet and logistics business (like food delivery). Both these problems are extremely hard on their own, and solving these two problems synchronously with each other makes quick commerce multiple times more complex than traditional retail, or food delivery. We also feel that in our business, the customer is extremely value conscious, but not price conscious. And we try our hardest to deliver the best value to the customer – which is a function of speed, assortment, customer support, and price – in that order. This enables us to make money from all of our customer cohorts, which further enables us to improve upon delivering on our customers’ expectations from us” Albinder Dhindsa, Blinkit’s CEO explained.
The company’s District brand has shown promise, rising to be worth 20% of Zomato’s size with an Rs.8,000 crore annualised NOV.
“We are building District as a one-of-a-kind platform for going-out in India by offering large going-out use cases including dining-out, movies, sports, concert ticketing etc. on a single app, for the most premium customer base in the country.” Deepinder Goyal, Eternal’s CEO and MD, explained.
Despite the wide losses, the company is still optimistic about breaking even, even though competition is intensifying.
“The opportunity in front of us is massive, which means that the competition in this space is also very high. We see an influx of new players in this segment every now and then, and we see varying aggression by existing competitors depending on their balance sheet and near-term growth objectives. Under no circumstances, will we let go of our market position here, and lose sight of the size of the prize in the long term” Albinder adds.
