Eternal Is Now More Blinkit Than Zomato

Earlier this year, when Zomato changed its name to Eternal, a lot of eyebrows were raised. It signified a shift in the company’s strategy. Zomato was no longer the focus. 

This was in February 2025. Come July, a cursory glance at Eternal’s (earlier Zomato’s) Q1 FY26 financial statement reveals how Eternal is now more Blinkit than Zomato. This extends to revenue, the growth narrative and the company’s future investments. 

Exhibit A: For the first time, Blinkit’s net order value (NOV) has surpassed food delivery’s NOV for a full quarter.

The indications were always there. A little over a year ago, CEO Deepinder Goyal himself said that Blinkit would be a bigger business than Zomato’s food delivery business.

And it’s playing out as we speak.

Food Delivery: Zomato’s Sluggish Growth

The industry-wide slowdown in the food delivery industry that began last year has persisted this quarter, weighing on Zomato’s overall business performance. 

While Zomato’s food delivery business’s adjusted revenue grew by 18% YoY to INR 2,657 Cr, the Delhi NCR-based company saw a tepid 10% growth on a sequential basis.

This can be attributed to the company’s meagre 9.5% rise on a sequential basis in its average monthly transacting customers, coupled with a drop in the average active monthly delivery restaurant partners. It is pertinent to note that last quarter, Zomato delisted over 19,000 restaurants from its platform.  

Moreover, Eternal pulling the plug off its quick food delivery category at a time when new players are emerging in this particular space highlights the company has lost some market share to its competitors. 

As a result, Zomato’s NOV declined by 13% as compared to the previous year. While gross order volume (GOV) saw better momentum, an increase in restaurant-funded discounts led to a growing gap between GOV and NOV. 

It needs to be noted that a higher reliance on discounts to increase demand reduces the effective value captured per order and can further squeeze partner margins. 

While Goyal believes Zomato is currently facing the worst in the food delivery business, the company is likely to achieve NOV north of 15% in FY26 and eventually will be able to trend towards 20% YoY growth in FY27. 

To top it off, Goyal blamed the unavailability of delivery partners due to festivals coupled with adverse weather conditions, which further impacts both food and quick commerce businesses. 

“In the past, in the food delivery business, this pressure on margins in Q1s used to be offset by improvement in other areas, but now that margins have matured in this business, such fluctuations driven by seasonal factors are possible,” he added. 

Blinkit, The Crown Jewel? 

Zomato-acquired Blinkit has become Eternal’s biggest B2C business during the quarter under review. 

Blinkit is currently contributing more than half of Eternal’s B2C annualised NOV and has grown 127% on a YoY basis. This growth is almost 10X as compared to Zomato’s NOV growth. 

Blinkit’s growth has been scaled by its aggressive expansion and infrastructure. To take on Zepto and Swiggy’s Instamart, Blinkit added 243 new stores, reaching 1,544 total stores. By the end of the year, Blinkit expects to have 2,000 dark stores under its belt. The company has even identified room for expansion up to 3,000 stores.

Besides, the quick commerce vertical also added 0.4 million sq ft of warehousing space,  thus operating a total of 5.6 million sq ft of warehousing space across the country.

Blinkit’s aggressive infra expansion underlines company’s growth is not only limited to metro cities. As per the company, Blinkit’s net average order value (AOV) in smaller cities trails metros by only 10%, whereas the operating cost is significantly lower there. As a, margins in tier II & III cities are likely to be just as attractive, suggesting more area for growth of the company.

Importantly, even in matured cities, like Delhi, where Blinkit has significant presence and faces intense competition, it saw its NOV grow by 70% YoY, suggesting a deeper market headroom across cities. 

On an annual basis, while Blinkit’s adjusted EBITDA margin tanked by 159% on the back of rapid expansion, on a sequential basis, margin increased by 16%, despite seasonal disruptions like monsoons and festivals. 

Moreover, Blinkit chief Albinder Dhindsa underlined that despite the expansion and stiff competition, a large portion of Blinkit’s operations is profitable, with some cities at 2.5% adjusted EBITDA margin (as of % of NOV).

Moving ahead, Blinkit anticipates its margin to improve significantly as it transitions from a marketplace to an inventory model. 

“The opportunity in front of us is massive, which means that the competition in this space is also very high. We see an influx of new players in this segment every now and then, and we see varying aggression by existing competitors depending on their balance sheet and near-term growth objectives. Under no circumstances, will we let go of our market position here, and lose sight of the size of the prize in the long term,” Dhindsa noted. 

Edited By Nikhil Subramaniam