Eternal To Set Up New Subsidiary 'Blinkit Foods'

Foodtech major Eternal (formerly Zomato) is setting up a new wholly owned subsidiary Blinkit Foods Limited.

In an exchange filing, the company said that Blinkit Foods will be engaged in the business food services, including innovation, preparation, sourcing, sale and delivery of food to customers.

The subsidiary will have a proposed authorised share capital of INR 1 Cr. While the company didn’t mention the segment which Blinkit Foods will cater to, it is likely to provide services to quick commerce arm Blinkit’s 10-minute food delivery service Bistro.

In its shareholder letter for Q1 FY26, Eternal said it has been making investments for expansion of Bistro, whose kitchen infrastructure is owned and operated by Blinkit. The company said that 38 such kitchens are currently live in Delhi NCR and Bengaluru.

“Early data is encouraging as the kitchens are generating incremental demand without cannibalising the Zomato business… While customer side traction is pretty strong, we need to work and find answers to making money in this business. We will therefore continue to make calibrated investments towards building a scalable and profitable business…” Eternal CEO Deepinder Goyal said.

Eternal said it incurred INR 60 Cr of capex in Q1, largely towards investments in Bistro kitchens and for the IT hardware and other requirements.

Overall, Eternal’s consolidated net profit crashed 90% to INR 25 Cr in Q1 FY26 from INR 253 Cr in the year-ago quarter. However, the top line surged over 70% to INR 7,167 Cr from INR 4,206 Cr in the similar period last year.

Strong Growth In Blinkit Despite Loss

Blinkit reported an operating revenue of INR 2,409 Cr in the June quarter, up about 40% from INR 1,714 Cr in the preceding March quarter. On a YoY basis, revenue rose over 155% from INR 943 Cr.

The quick commerce arm’s adjusted EBITDA loss stood at INR 162 Cr during the quarter under review as against a loss of INR 178 Cr in the March quarter and a loss of INR 3 Cr in the year-ago quarter.

The sequential rise in adjusted EBITDA loss came as Blinkit continued its expansion spree. It added 242 new dark stores during the quarter, taking the total store count to 1,544. Eternal spent INR 370 Cr on capex in Q1, of which about INR 310 Cr was spent on the expansion of quick commerce store and warehouse network.

“We also added 0.4 Mn sq ft of warehousing space and now operate over 5.6 Mn sq ft of warehousing space across the country. Including the store area, we now manage around 10.4 Mn sq ft of supply chain infrastructure,” Blinkit CEO Albinder Dhindsa said.

He added that the company is on track to get to 2,000 stores by December 2025.

Blinkit’s Transition To Inventory Ownership Model

Despite the expansion, Blinkit saw some improvement in its margins. The adjusted EBITDA margin of the business as a percentage of its net order value stood at -1.8% in the June quarter compared to -2.4% in the preceding March quarter.

“The long-term profitability of the business is not a concern,” said Dhindsa. “A large portion of our business is already profitable, with some cities delivering over 2.5% adjusted EBITDA margins. This gives us confidence in our long-term guidance of achieving 5–6% margin at scale.”

He added that margins appear to have “bottomed out” and losses should reduce further as newly opened stores mature. However, he cautioned that the improvement might not be linear and could face volatility if the competitive intensity increases.

Eternal CFO Akshant Goyal said that around 3% of Blinkit’s NOV was fulfilled through its own inventory in Q1 FY26. This shift in fulfillment strategy contributed to quick commerce revenue growing 155% YoY, outpacing NOV growth, despite take rates remaining flat.

Notably, the company recently decided to move from a marketplace-led model to an inventory-led model. It expects to completely transition to the new model over the next 2-3 quarters.

Shares of Eternal ended today’s trading session 5.38% higher at INR 271.2 on the BSE.

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