Eternal Ltd reported revenue from operations of ₹24,138 crore in Q2 FY27, up 78% from ₹13,590 crore a year earlier. The headline number is impressive, but the story behind it is all about Blinkit. Investor Presentation
Blinkit's adjusted revenue hit ₹19,152 crore*, up 94% year-on-year (84% on a like-for-like basis). That's roughly 78% of Eternal's total adjusted revenue. More importantly, Blinkit accounted for about 87% of the YoY increase in adjusted revenue—roughly ₹9,260 crore of the ₹10,650 crore rise. This is my calculation from the segment figures. Investor Presentation +2
Revenue now includes the full value of goods sold, which lifts reported growth without a matching rise in underlying activity. Investor Presentation +2
Other segments grew but couldn't match Blinkit's pace. Food delivery revenue rose 35.5% to ₹3,879 crore, Hyperpure grew 12.8% to ₹1,154 crore, and Going-out jumped 60.8% to ₹304 crore. Blinkit's net order value (NOV) of ₹20,940 crore, up 79.3%, drove about 74% of the total B2C NOV increase. Investor Presentation +3
Net profit after tax surged 92% to ₹125 crore from ₹65 crore in Q2 FY26. Profit before tax grew even faster, up 150% to ₹323 crore. So what drove this? Investor Presentation +1
Operating leverage played a key role. Total expenses rose 75% to ₹24,166 crore, slightly slower than the 78% revenue growth. This gap helped expand margins. Adjusted EBITDA jumped 197% to ₹666 crore. Investor Presentation +3
Blinkit's turnaround was crucial. It swung from an adjusted EBITDA loss of ₹156 crore to a profit of ₹184 crore—its sixth straight quarter of margin improvement. That's roughly ₹340 crore of the ₹442 crore YoY increase in consolidated adjusted EBITDA, making Blinkit the main margin driver. Investor Presentation +2
Food delivery remained the profit engine, with adjusted EBITDA of ₹627 crore (up 25%), though its margin slipped slightly to 5.5% of NOV. Going-out and Others segments continued to bleed, with losses of ₹64 crore and ₹91 crore respectively. Investor Presentation +1
The cost increases were substantial but not indiscriminate. Purchases of stock-in-trade—the largest cost line—surged 79% to ₹15,746 crore, reflecting Blinkit's inventory-led model. This now accounts for 65.2% of revenue, up from 63.6% in Q1 FY27. Investor Presentation
Delivery and related charges rose 62% to ₹3,581 crore, but as a percentage of revenue, they actually fell from 16.3% to 14.8%—a sign of scale benefits. Employee benefits grew 32.5% to ₹1,146 crore, with its share of revenue dropping from 6.4% to 4.7%. Investor Presentation
Blinkit's cost structure is complex. Contribution margin—adjusted revenue less costs like dark store operations, last-mile delivery, warehousing, customer subsidies, and wastage—stood at 5.3% of NOV, up from 4.6% a year ago. Inventory losses, mainly from perishables, were about 1.8% of NOV and are netted within gross profit. Investor Presentation +3
Management has been working on efficiency. Dark store productivity has improved over recent quarters. In Q1 FY27, net working capital days fell from 18 to 14, with a target of 12. The free-delivery threshold for Gold members was lowered to ₹99 from ₹199 to increase low-value order costs. Transcript +3
Despite the strong growth, Eternal's profit of ₹125 crore missed analyst estimates of around ₹304 crore. Revenue actually beat expectations at ₹24,138 crore versus an estimated ₹23,447 crore. So where did the gap come from?
The EBITDA miss was small—₹752 crore actual versus ₹776 crore estimated—but the PAT miss was large. This suggests most of the gap arose below the EBITDA line.
Tax expense was the big culprit. At ₹198 crore on pre-tax profit of ₹323 crore, the effective tax rate was about 61%. The company noted that tax was previously provided mainly on treasury income. The rise is mainly because the standalone parent is now providing tax on business income, with carried-forward losses being fully used in FY27. Investor Presentation +2
Costs below EBITDA grew faster than revenue. Depreciation rose 66% to ₹625 crore, finance costs jumped 80% to ₹155 crore (mostly lease interest), and ESOP expense climbed to ₹262 crore from ₹174 crore. These non-operating costs weighed heavily on the bottom line. Investor Presentation +1
Management provided clear guidance on Blinkit's expansion. The company expects to cross 3,500 stores by March 2027 and about 5,000 by March 2028, up from earlier guidance of 3,000 by March 2027. Blinkit ended Q2 with 2,751 stores after adding 308 net new stores. Investor Presentation +3
The rationale for faster expansion: new stores in smaller cities and newer categories are on the right margin and payback path, and stores in contested markets are meeting return thresholds at current competitive intensity. Management said cash and profits from food delivery and quick commerce can fund this pace. Investor Presentation
On margins, management expects adjusted EBITDA to keep improving as mature stores and cities offset early-stage dilution from new stores. Mature cities already run above 5% adjusted EBITDA margin. Cities making up about 96% of NOV are contribution positive, and about 70% are adjusted EBITDA positive. Investor Presentation +1
Management said it does not manage the business for near-term margins and wants evidence of steady-state margins. On competition, it noted having a clearer read and that Q1 FY27 was likely the peak of competitive intensity. Investor Presentation +1
The big question now is whether Blinkit can maintain its growth momentum while improving margins enough to offset the rising costs that dragged down Q2 profits. With store expansion accelerating and tax headwinds likely to persist, the path to meeting market expectations will depend on execution.
*Note: According to Eternal’s Q2 FY27 Investor Presentation, the sharp increase in YoY Adjusted Revenue growth is mainly due to the shift to the 1P model in quick commerce, where Revenue now also includes the full monetary value of goods sold (versus largely marketplace commission in Q1FY26).
