Eternal: A Quick-Commerce Leader Worth Holding

$ETERNAL Eternal, the parent of Zomato and Blinkit, is becoming a quick commerce-led company. This can create value, but only if Blinkit converts growth into durable profits and good returns on capital. Consolidated revenue jumped 182% year-on-year to ₹20,211 crore from ₹7,167 crore. Adjusted EBITDA rose 223% to ₹555 crore, while net profit increased 268% to ₹92 crore from ₹25 crore. Profit fell 47% sequentially from ₹174 crore, largely because of higher taxes. Blinkit was the main growth engine. Revenue reached ₹15,664 crore, against ₹2,400 crore a year earlier. Net order value rose 86.2% to ₹17,132 crore. Adjusted EBITDA moved from a loss of ₹162 crore to a profit of ₹102 crore. Blinkit added 200 stores, taking the total to 2,443. The improving profitability is positive for shareholders. Eternal believes Blinkit can eventually achieve about 6% adjusted EBITDA margin and over 40% pre-tax ROCE. Its steady-state assumptions include ₹2.5 crore capex per store, 12 days of working capital and around ₹11 lakh NOV per store per day. If achieved, expansion can create value. Zomato's food-delivery business provides a cushion. It generated ₹3,100 crore revenue, while adjusted EBITDA reached ₹606 crore. Its cash generation can support newer businesses. But risks remain. Blinkit is more capital intensive, with capex per store rising from ₹1 crore to ₹2.5 crore. Competition from Zepto, Swiggy Instamart and large e-commerce players could trigger discounts and higher spending. These are targets, not current realities. For shareholders the key question is how efficiently Eternal grows too. If Blinkit delivers higher margins and attractive capital returns, Eternal can create long-term value. If quick commerce becomes a prolonged price war, rapid growth could instead consume capital and weaken returns.