ETERNAL

’s Blinkit Breakthrough Offset by Competitive Risks

reported an encouraging Q3FY26 performance, with adjusted EBITDA rising 63% sequentially to ₹364 crore, driven by a turnaround in its quick commerce arm Blinkit, which posted its first-ever profit of ₹4 crore versus a loss of ₹156 crore in Q2. The shift to an owned-inventory model has strengthened margins and contribution per order, though competitive pressures and expansion costs could weigh on future profitability. Elevated valuations remain a concern despite recent stock corrections. Blinkit Quick Commerce - Profit of ₹4 crore in Q3 vs loss of ₹156 crore in Q2. - Owned-inventory share rose to 90% of net order value (NOV) vs 80% in Q2. - Contribution per order improved to ₹30, up 25% QoQ, aided by sales mix, operating leverage, and seasonality. - Gross margin dipped 20 bps QoQ to 26.6%. - NOV grew 14% sequentially to ₹13,300 crore, despite GST cuts shaving ~3 percentage points off growth. - Store count reached 2,027, short of 2,100 target; management confident of 3,000 stores by FY27, implying 200 additions per quarter. Risks: delivery fee waivers in competitive markets and potential acceleration to 3,500–4,000 stores by FY27, which could dent EBITDA. Food Delivery Business - NOV rose 17% YoY to ₹9,846 crore. - Monthly transacting customers grew 21% YoY to 24.9 million, lowering average order value per customer. - Takerate increased 243 bps to 31%, but EBITDA margin rose only 40 bps to 5.4%, constrained by higher operating costs. Leadership Transition - Founder CEO Deepinder Goyal handed over reins to Albinder Dhindsa, Blinkit’s CEO. - Transition seen as smooth, but investors remain focused on execution and profitability. Valuation and Outlook - Blinkit’s profitability is a milestone, but competitive intensity and expansion costs could pressure margins. - Elevated valuations suggest limited near-term upside, though strong NOV growth and operating leverage provide long-term potential.