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Time of India
12-05-2025
- Business
- Time of India
Blinkit, Instamart face rising competition, elusive profitability in Q4
The post-results commentary from Zomato parent Eternal as well as from Swiggy had a common denominator: both companies pointed at heightened competition in the quick commerce space. Although Eternal 's Blinkit held on to its lead over Swiggy 's Instamart , financial results for the March quarter showed both quick delivery platforms struggling to turn profitable. Adjusted Ebitda margin as a share of Gross Order Value (GOV)—a measure of profitability —for Eternal's quick commerce operations dropped to -1.9% in the three months to March 31, from -0.9% a year ago and -1.3% in the previous quarter. For Swiggy, the adjusted Ebitda margin for the quick commerce segment was -18% for the March quarter, against -13.2% in the year-ago period and -14.8% in the December quarter. Network expansion reflects in profits Both Eternal and Swiggy made aggressive investments in their quick commerce businesses during the last quarter to expand their networks as existing and new rivals upped the ante. Blinkit posted its highest-ever net store addition at 294 and is on track to become a 200-store network by December. Instamart added 316 dark stores to meet the 1,000-store target it had set for March 2025. This was reflected in the segmental results the quick commerce players put out for the fourth quarter of fiscal year 2025: Eternal's quick commerce arm had an adjusted Ebitda loss of Rs 178 crore, compared with an adjusted Ebitda loss of Rs 37 crore last year and Rs 103 crore in the previous quarter. For Swiggy, the adjusted Ebitda loss during the period under review was Rs 840 crore, widening from Rs 307 crore in the year-ago period and Rs 578 crore in the previous quarter. Blinkit's margin expansion under pressure The impact of competition has been seen in the lack of significant margin expansion as expected, said Blinkit Chief Executive Officer (CEO) Albinder Dhindsa, even as take rates and contribution margins remain stable sequentially. Take rate refers to the commission or fees that aggregators like Zomato or Swiggy charge for delivering food from a restaurant, which they keep as revenue. 'There are now more players in the market, and there is obviously more competition across categories to market to the same set of customers, which is leading to some margin pressure, both in terms of being able to charge higher delivery fees in some geographies and also in being able to sell more of the higher-margin categories on the platform,' Dhindsa told analysts in a post-earnings call. The company is expecting healthy dividends from its aggressive expansion into tier-2 and tier-3 cities, the Blinkit CEO said. Margins are likely to remain under stress, at least in the near term, analysts believe. Losses will increase or decrease in the near future depending on how the pace of expansion and competitive intensity play out over the next few quarters, according to analysts at Kotak Institutional Equities. Brokerage house Motilal Oswal Financial Services said its profitability estimates for Blinkit are delayed even further, with a breakeven expected only in fiscal year 2027. Instamart playing catch-up Instamart is lagging behind its largest peer, Blinkit, going by the numbers and what analysts say. Swiggy has spent big on its quick commerce unit to expand its darkstore footprint and gain market share amid intensifying competition. However, Blinkit remains the dominant force in the quick commerce space with a bigger market share, larger store network, and markedly less cash burn. While Swiggy reported higher revenue growth than Zomato in food delivery, Blinkit continues to grow at a faster rate than Instamart despite being twice its size, noted brokerage house Nuvama. Swiggy CEO Sriharsha Majety said that adjusted Ebitda losses for the quick commerce vertical have peaked , and Instamart will progressively unwind losses. However, the company revised the contribution margin breakeven deadline to three to five quarters, from three quarters earlier. Analysts at Motilal Oswal flagged irrational competition and cash burn intensity at Instamart as a reason for caution. To put things in perspective, adjusted Ebitda loss levels show that while Blinkit lost Rs 2 for every Rs 100 of Gross Order Value (GOV), Instamart lost Rs 18. Also Read: Swiggy Instamart delivers 101% YoY growth in Q4 GOV Zomato's loss, Swiggy's gain? Earlier this month, Zomato bowed out of the quick food delivery space, while Swiggy doubled down on it. Announcing its March quarter results, Eternal confirmed that it has closed its 15-minute food delivery platform, Quick, and homely meal service Everyday. The services were closed as the infrastructure is not mature enough to ensure consistent service quality under Quick, and Everyday did not 'move the needle' for the food delivery business, the Eternal management told analysts in a post-earnings call. But Swiggy has pinned its hopes on its 10-minute food delivery service Bolt driving growth and market share for the overall vertical. 'New users acquired through Bolt have shown 4–6% higher monthly retention than the platform average,' the company said. Also Read: Quick commerce price war: Rivals offering steep discounts to capture market, says Swiggy CFO
Time of India
12-05-2025
- Business
- Time of India
Blinkit, Instamart face rising competition, elusive profitability in Q4
Live Events The post-results commentary from Zomato parent Eternal as well as from Swiggy had a common denominator: both companies pointed at heightened competition in the quick commerce space. Although Eternal's Blinkit held on to its lead over Swiggy's Instamart , financial results for the March quarter showed both quick delivery platforms struggling to turn Ebitda margin as a share of Gross Order Value (GOV)—a measure of profitability—for Eternal's quick commerce operations dropped to -1.9% in the three months to March 31, from -0.9% a year ago and -1.3% in the previous Swiggy, the adjusted Ebitda margin for the quick commerce segment was -18% for the March quarter, against -13.2% in the year-ago period and -14.8% in the December Eternal and Swiggy made aggressive investments in their quick commerce businesses during the last quarter to expand their networks as existing and new rivals upped the posted its highest-ever net store addition at 294 and is on track to become a 200-store network by December. Instamart added 316 dark stores to meet the 1,000-store target it had set for March was reflected in the segmental results the quick commerce players put out for the fourth quarter of fiscal year 2025: Eternal's quick commerce arm had an adjusted Ebitda loss of Rs 178 crore, compared with an adjusted Ebitda loss of Rs 37 crore last year and Rs 103 crore in the previous quarter. For Swiggy, the adjusted Ebitda loss during the period under review was Rs 840 crore, widening from Rs 307 crore in the year-ago period and Rs 578 crore in the previous impact of competition has been seen in the lack of significant margin expansion as expected, said Blinkit Chief Executive Officer (CEO) Albinder Dhindsa, even as take rates and contribution margins remain stable sequentially. Take rate refers to the commission or fees that aggregators like Zomato or Swiggy charge for delivering food from a restaurant, which they keep as revenue.'There are now more players in the market, and there is obviously more competition across categories to market to the same set of customers, which is leading to some margin pressure, both in terms of being able to charge higher delivery fees in some geographies and also in being able to sell more of the higher-margin categories on the platform,' Dhindsa told analysts in a post-earnings company is expecting healthy dividends from its aggressive expansion into tier-2 and tier-3 cities, the Blinkit CEO are likely to remain under stress, at least in the near term, analysts believe. Losses will increase or decrease in the near future depending on how the pace of expansion and competitive intensity play out over the next few quarters, according to analysts at Kotak Institutional house Motilal Oswal Financial Services said its profitability estimates for Blinkit are delayed even further, with a breakeven expected only in fiscal year is lagging behind its largest peer, Blinkit, going by the numbers and what analysts say. Swiggy has spent big on its quick commerce unit to expand its darkstore footprint and gain market share amid intensifying competition. However, Blinkit remains the dominant force in the quick commerce space with a bigger market share, larger store network, and markedly less cash Swiggy reported higher revenue growth than Zomato in food delivery, Blinkit continues to grow at a faster rate than Instamart despite being twice its size, noted brokerage house CEO Sriharsha Majety said that adjusted Ebitda losses for the quick commerce vertical have peaked , and Instamart will progressively unwind losses. However, the company revised the contribution margin breakeven deadline to three to five quarters, from three quarters at Motilal Oswal flagged irrational competition and cash burn intensity at Instamart as a reason for caution. To put things in perspective, adjusted Ebitda loss levels show that while Blinkit lost Rs 2 for every Rs 100 of Gross Order Value (GOV), Instamart lost Rs this month, Zomato bowed out of the quick food delivery space, while Swiggy doubled down on its March quarter results, Eternal confirmed that it has closed its 15-minute food delivery platform, Quick, and homely meal service Everyday. The services were closed as the infrastructure is not mature enough to ensure consistent service quality under Quick, and Everyday did not 'move the needle' for the food delivery business, the Eternal management told analysts in a post-earnings Swiggy has pinned its hopes on its 10-minute food delivery service Bolt driving growth and market share for the overall vertical. 'New users acquired through Bolt have shown 4–6% higher monthly retention than the platform average,' the company said.
Yahoo
02-05-2025
- Business
- Yahoo
Zomato-parent Eternal's quick commerce expansion saps fourth-quarter profit
By Ananta Agarwal (Reuters) -Indian online delivery player Eternal reported a nearly 78% drop in fourth-quarter profit on Thursday, as its fast-growing quick commerce arm Blinkit spent aggressively to open more stores and stave off intense competition. Shares of Eternal, which officially changed its name from Zomato in March, had more than doubled in each of the last two years, partly fueled by optimism around Blinkit's success. But competition in India's quick commerce space is intensifying. Blinkit accelerated store openings and offered discounts and subsidized delivery as it jostled for market share with smaller rivals, Swiggy's Instamart and start-up Zepto. Eternal said it sees the competition intensifying in the near term. "The impact is visible in the lack of significant margin expansion that we would have otherwise expected," Blinkit CEO Albinder Dhindsa said in a call with analysts. Quarterly revenue from Blinkit more than doubled year on year to 17.09 billion rupees. But adjusted core loss widened to 1.78 billion rupees from 370 million rupees last year, while its store count has more than doubled year on year to 1301 stores. Eternal on Thursday also flagged likely competition from companies like Amazon and Walmart backed Flipkart, where some delivery times have shortened to four to six hours. The two giants are also newer entrants in the quick commerce industry. Meanwhile, growth in Eternal's food delivery platform, Zomato, has slowed down the past few months due to a "sluggish demand environment" and competition from quick commerce itself, which delivers packaged meals, Eternal said. The company also said it is shutting down Zomato Quick, which delivered food from nearby restaurants with the speed of quick commerce, months after rolling the service out, citing "inconsistent customer experience". Adjusted revenue for Zomato grew 17% year-on-year to 24.09 billion rupees, below Eternal's forecast of 20% growth. Eternal reported a consolidated net profit of 390 million rupees ($4.6 million) in the March quarter, compared to 1.75 billion rupees last year. ($1 = 84.5880 Indian rupees)
Economic Times
02-05-2025
- Business
- Economic Times
Eternal shares in focus after Q4 profit slumps 78% YoY, revenue jumps 64%
Food delivery business Live Events Blinkit Hyperpure Eternal shares price target (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Shares of Eternal (formerly Zomato ) will be in focus on Friday after the food delivery platform reported a 78% year-on-year (YoY) decline in net profit to Rs 39 crore for the March 2025 quarter. However, revenue from operations surged 64% YoY to Rs 5,833 sharp drop in profit was driven by a 68% YoY increase in total expenses, which rose to Rs 6,104 crore. The company attributed the higher costs to increased investments in its quick commerce vertical, Blinkit, as well as elevated infrastructure spending across EBITDA during the fourth quarter declined 15% YoY to Rs 165 core food delivery business remained stable, with GOV (Gross Order Value) of Rs 8,439 crore, up 6% sequentially. Adjusted EBITDA margin for the segment stood at 5.7%. The company attributed the margin gains to improved average order values and better logistics commerce arm Blinkit saw a strong jump in business during Q4. Revenue rose 122% YoY to Rs 1,709 crore from Rs 769 crore a year earlier. The Net Order Value (NOV) increased 53% YoY and 19% has also introduced a new consolidated metric called Adjusted Net Order Value, which it says offers a better lens to evaluate business growth across company added 75 new Blinkit stores during the quarter, taking the total to 526 stores across 26 cities. However, the aggressive expansion led to wider losses. Adjusted EBITDA loss for Blinkit increased to Rs 178 crore in CEO Albinder Dhindsa said the company had pulled forward many store launches originally planned for FY26, saying, 'This was a conscious call to pre-empt competition and strengthen our footprint."The company said profitability is not the immediate priority for Blinkit. "Our priority is to build a strong, reliable network. Profitability will follow scale," the management said in its letter to Eternal's B2B grocery and supply chain business for restaurants, clocked a revenue of Rs 929 crore, up 52% YoY. Adjusted EBITDA loss narrowed to Rs 25 crore from Rs 33 crore in the previous company said it continues to see Hyperpure as a long-term play and expects further improvement in margins as scale FY25, Eternal reported a full-year consolidated profit of Rs 351 crore. Adjusted revenue for the year stood at Rs 20,059 crore, up 67% per Trendlyne data, the average target price of the stock is Rs 277, which shows an upside of 19% from the current market prices. The consensus recommendation from 29 analysts for the stock is a 'Buy'.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Time of India
02-05-2025
- Business
- Time of India
Eternal shares in focus after Q4 profit slumps 78% YoY, revenue jumps 64%
Shares of Eternal (formerly Zomato ) will be in focus on Friday after the food delivery platform reported a 78% year-on-year (YoY) decline in net profit to Rs 39 crore for the March 2025 quarter. However, revenue from operations surged 64% YoY to Rs 5,833 crore. The sharp drop in profit was driven by a 68% YoY increase in total expenses, which rose to Rs 6,104 crore. The company attributed the higher costs to increased investments in its quick commerce vertical, Blinkit, as well as elevated infrastructure spending across segments. Adjusted EBITDA during the fourth quarter declined 15% YoY to Rs 165 crore. Food delivery business Eternal's core food delivery business remained stable, with GOV (Gross Order Value) of Rs 8,439 crore, up 6% sequentially. Adjusted EBITDA margin for the segment stood at 5.7%. The company attributed the margin gains to improved average order values and better logistics efficiency. Live Events Also Read: HDFC Bank, SBI Life among 10 largecap stocks that earned upgrades in last 1 month. Check revised target price Blinkit Quick commerce arm Blinkit saw a strong jump in business during Q4. Revenue rose 122% YoY to Rs 1,709 crore from Rs 769 crore a year earlier. The Net Order Value (NOV) increased 53% YoY and 19% quarter-on-quarter. Eternal has also introduced a new consolidated metric called Adjusted Net Order Value, which it says offers a better lens to evaluate business growth across platforms. The company added 75 new Blinkit stores during the quarter, taking the total to 526 stores across 26 cities. However, the aggressive expansion led to wider losses. Adjusted EBITDA loss for Blinkit increased to Rs 178 crore in Q4FY25. Blinkit CEO Albinder Dhindsa said the company had pulled forward many store launches originally planned for FY26, saying, 'This was a conscious call to pre-empt competition and strengthen our footprint." The company said profitability is not the immediate priority for Blinkit. "Our priority is to build a strong, reliable network. Profitability will follow scale," the management said in its letter to shareholders. Also Read: DIIs surpass FPIs in ownership of companies listed on NSE after 22 years Hyperpure Hyperpure, Eternal's B2B grocery and supply chain business for restaurants, clocked a revenue of Rs 929 crore, up 52% YoY. Adjusted EBITDA loss narrowed to Rs 25 crore from Rs 33 crore in the previous quarter. The company said it continues to see Hyperpure as a long-term play and expects further improvement in margins as scale increases. For FY25, Eternal reported a full-year consolidated profit of Rs 351 crore. Adjusted revenue for the year stood at Rs 20,059 crore, up 67% YoY. Eternal shares price target As per Trendlyne data, the average target price of the stock is Rs 277, which shows an upside of 19% from the current market prices. The consensus recommendation from 29 analysts for the stock is a 'Buy'. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
