Eternal Q1: Blinkit swings to profit, revenue triples YoY; ₹92 Cr PAT trails street
PAT +268% YoY · revenue +182% · margins flat · miss vs street
₹20,211 Cr
+182% YoY
₹92 Cr
+268% YoY
0.45%
+0.1pp YoY
₹0.1
Eternal (formerly Zomato) posted consolidated Q1 FY27 revenue of ₹20,211 Cr, up 182% YoY (₹7,167 Cr) and 17% QoQ, with PAT of ₹92 Cr versus ₹25 Cr a year ago. The headline growth flatters, however: the near-tripling of the top line is largely a gross-up as Blinkit's quick-commerce arm moved from a marketplace-commission model to an inventory-led one — QC revenue jumped to ₹15,664 Cr from ₹2,400 Cr YoY and is now the group's dominant revenue line. On the bottom line, the ₹92 Cr print undershot the street, which (per Business Standard/JM Financial previews) had modelled 11-15x YoY PAT growth — roughly ₹275-375 Cr — on Blinkit's momentum. That is a clear miss on the reported number.
Q1 FY-2027 vs prior quarters
The miss, though, is almost entirely a tax artifact rather than operating deterioration. Profit before tax actually rose to ₹272 Cr, up 209% YoY and 19% sequentially; the fall from ₹174 Cr PAT in Q4 came from the effective tax rate spiking to ~66% (₹180 Cr) from ~24% a quarter earlier. Net margin thinned to 0.45% from 0.99% in Q4, though it sits above the year-ago 0.33%. The genuine operating story is Blinkit turning profitable at segment level — a ₹365 Cr result against a ₹42 Cr loss a year ago and ₹265 Cr in Q4 — alongside a steady India food-ordering business (segment result ₹621 Cr, +33% YoY). Going Out remained a drag at −₹61 Cr.
The stock went into the print at ₹282.5, up 7.5% over the past month of trading.
For context: revenue is at a 6-quarter high.
Management introduced a strong long-term outlook, guiding for a 60%+ NOV CAGR in the Quick Commerce business for the next three years and targeting $1 billion in consolidated adjusted EBITDA by FY29. They remain on track for 3,000 dark stores by March and expect growth to accelerate in the upcoming quarter. The core st
— This quarter: met
The quarter tracks management's Q4 concall framing: 60%+ NOV CAGR in quick commerce over three years, 3,000 dark stores by March, $1bn consolidated adjusted EBITDA by FY29, and an explicit preference for absolute profit growth over margin percentage while reinvesting — so the thin net margin amid expanding QC scale is consistent with that posture, not a contradiction of it. Alongside results, the board approved a ₹35 Cr slump-sale of the small 'Nugget by Zomato' B2B AI-support business (FY26 revenue just ₹7.2 Cr) to wholly-owned subsidiary CTPL, an internal restructuring rather than a material event. The GST overhang persists: demand orders and SCNs totalling ₹447 Cr on GST on delivery charges are being contested, flagged by Deloitte as an emphasis-of-matter. No management press release was captured in our records for this filing, so this read rests on the filed statements and the prior concall guidance.
W1
Blinkit dark-store rollout toward the 3,000-store March target and 60%+ NOV CAGR guidance — verify next quarter builds on the ₹365 Cr QC segment result.
W2
Effective tax rate: whether the ~66% Q1 charge normalises, since it masked a PBT that rose 19% QoQ to ₹272 Cr.
W3
Progress toward the $1bn consolidated adjusted EBITDA by FY29 target — track absolute-profit growth against the 0.45% net margin.
Record revenue masked by margin collapse; profitability claims unsubstantiated
The verdict, the claims that held up, the sharpest analyst exchanges, and the risks — the earnings call, decoded from the transcript.
Hold
confidence 7/10
Grade C
Maintained $1B EBITDA FY29 goal from prior calls; no new FY27/FY28 revenue/profit targets given. Q1 profitability far below stated 4% EBIT target.
Cautiously Optimistic
next 1–2 quarters
Optimistic
multi-year
Spectacular revenue growth (182% YoY) masks a profitability cliff: PAT down 47% QoQ despite 16.9% revenue growth, leaving NPM at 0.5%—far below 4-6% guidance. Management claims competitive peak passed and margins will improve, but Q1 data contradicts this. Long-term ROCE framework offers optionality if execution delivers; near-term margin pressure is the key risk.
₹20211 Cr
Revenue · +182% YoY₹92 Cr
Reported PAT · +268% YoYCompressing
Margins · vs guidance: OverstatedDid the claims hold up?
Q1 was peak competitive intensity
MISSPAT down 47% QoQ despite 16.9% QoQ revenue growth; margin claims lack support
Margins expected to improve directionally
OVERSTATEDOPM 2.9%, NPM 0.5%, QoQ PAT declined; no near-term expansion visible
4% EBIT margin and 6% Adj EBITDA margin long-term
UnverifiedNPM 0.5%, OPM 2.9% current quarter; gap suggests 5-6 year horizon minimum
Older cohorts spending 3x vs 3 years ago, retention holding
MET60% of cohort retained overall; 3x for full cohort including churn
Discount-led growth unsustainable; competitive intensity predictable
PartialCompany still matching prices in competitive markets; assertion unproven
Earnings quality
What changed since the last call
Capex per store raised 150%
UpgradeFrom ₹1 Cr to ₹2.5 Cr to expand supply chain capacity; warehousing lumpy. No immediate margin benefit.
Quick Commerce margin guidance raised from 5-6% to 6%
UpgradeManagement claims higher visibility on margins; actual OPM 2.9%, far below. Gap unresolved.
Long-term guidance maintained, not raised
NeutralSame $1B adjusted EBITDA FY29, same 60%+ NOV CAGR. Prior call already set these. No new quantified targets.
AOV guidance shifted to flat expectation
DowngradePrior: assortment expansion expected to lift AOV. Now: AOV to stay range-bound. Revenue growth frequency-only.
The Q&A
Analysts pressed hard on profitability: how 0.5% NPM reconciles with 4% EBIT guidance, whether competition peak claim is proven, capex ROI math. Management defended via ROCE framework and blamed seasonality, wage hikes, and store ramp costs. Held firm on margin improvement but offered no near-term proof.
QC margin guidance upgrade — Gaurav Malhotra, Axis
PartialCapex increases and larger stores driving efficiency. Higher capex per store lining up for margin expansion. Now have higher visibility on margins.
Competitive intensity and pricing trap — Vivek Maheshwari, Jefferies
AnsweredQ1 was peak; competition now predictable (subsidy-based). Discount-led growth unsustainable—no pullback path once customers expect subsidies. Prior experience shows discount strategy failed; infrastructure wins.
MTU doubling and pricing strategy — Vivek Maheshwari, Jefferies
PartialStrategy is not zero discount; we reinvest profits into value. Gradual process. Expect competitive intensity to ease, reducing need to match.
AOV decline drivers — Aditya Soman, CLSA
AnsweredAOV flat YoY for Q1, same as last year. Mix of categories and seasonal factors. We don't drive NAOV; outcome of assortment. Focus is NOV and margins.
NAOV outlook amid assortment expansion — Manish Adukia, Goldman Sachs
AnsweredWallet share grows but NAOV stays flat. Low-margin assortment added (general merchandise). Higher frequency = smaller cart size. Conflicting pulls offset NAOV growth.
EBIT margin claims vs reality — Vijit Jain, Citigroup
AnsweredYes, includes ESOP and depreciation. That's the long-term framework.
Capex per store vs NOV growth reconciliation — Manish Adukia, Goldman Sachs
PartialCapex tied to supply chain and warehousing, not just store. Capex expands market, opens smaller-city stores at lower NOV per day but profitable at 6% margin. ROCE framework matters, not individual metrics.
Profitability roadmap — Aditya Suresh, Macquarie
DodgedEBIT margin negative, no ROCE today (industry in making). Framework is how much to invest. Talk about future targets, not current.
MTU addition drivers — Ankur Rudra, JP Morgan
DodgedNot really anything different.
Competitive response in food delivery — Ankur Rudra, JP Morgan
PartialPrice competitive in certain markets. Example: lowered gold free delivery threshold from ₹199 to ₹99. That defends against low-value order formats.
Margin outlook given peak competition — Manish Adukia, Goldman Sachs
PartialAt this point we can say that.
Payables increase driver — Ashwin Mehta, Ambit
AnsweredBoth trade and expense payables included. Increase driven by business scale, not aggressive vendor terms. Expense payables fluctuate.
Guidance
Quick Commerce 60%+ NOV CAGR for 3-year horizon
MediumFrom prior calls; not upgraded this quarter. Based on cohort retention and frequency growth, not AOV expansion.
Adjusted EBITDA margin 6% long-term
LowStated target. Current OPM 2.9%; gap of 3+ percentage points. Timeframe unclear—likely FY28–FY29.
EBIT margin 4% long-term (incl ESOP, depreciation)
LowLong-term aspiration. Current NPM 0.5%. Contradicted by near-term QoQ PAT decline of 47%.
Quarterly margin pressures easing post-Q1 peak
MediumManagement asserts competitive peak has passed; unverified. Next quarter will test credibility.
₹2.5 Cr capex per store (up from ₹1 Cr)
HighIncludes warehousing and supply chain. Lumpy investment horizon. Expect continued heavy capex for geographic expansion.
Focus on larger store format (2,100-2,200 OPD)
HighShift to premium real estate. Ramp time longer but higher throughput potential.
Risks the call surfaced
Profitability trajectory
HighPAT ₹92 Cr (0.5% NPM) far below 4% EBIT guidance. QoQ decline 47% despite revenue growth signals margin compression, not expansion.
Competitive intensity
HighManagement claims Q1 competitive peak has passed and become 'predictable.' Unverified assertion. Rivals may sustain aggressive subsidy spending.
Capex ROI uncertainty
MediumCapex per store up 150% (₹1Cr→₹2.5Cr) but NOV per store only +60%. Larger stores take longer to ramp; ROI timeline unclear.
AOV flattening and frequency dependency
MediumNAOV flat for two quarters. Growth now frequency-only; no pricing power. If user acquisition slows, growth stalls.
Inventory shrink structural headwind
MediumInventory losses 1.8% of NOV (perishables-driven). Management admits losses are 'asymptotic,' unlikely to improve materially.
Management
Score 6/10. Candid on cost pressures (wages, inventory loss, store ramp) and competitive dynamics. Vague on margin recovery timeline and ROCE path. Avoids quantifying near-term targets. Delivered strong YoY revenue growth (182%); scale-up proven. However, QoQ PAT decline 47% despite 16.9% revenue growth signals margin execution miss. Capex per store doubled with uncertain ROI.
1 · Sep 2026
Q2 FY27 results; guidance on margin trajectory
2 · FY27 full-year
Blinkit profitability inflection if capex payoff materializes
3 · FY28–FY29
$1B adjusted EBITDA milestone and path to 4% EBIT
Long-term ROCE framework offers optionality if execution delivers; near-term margin pressure is the key risk.