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Eternal
Our verdict on Eternal isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
Food delivery NOV growth accelerated to 16.6% YoY in Q3FY26, exceeding the 15% near-term expectation. (1 met across 1 tracked commitment)
“That said, we do expect YoY growth to inch up gradually towards 20% over time.”
The transition is largely complete with 80% of NOV already on the own inventory model as of Q2FY26. (3 met across 3 tracked commitments)
“As a result, in Q2FY26 about 80% of the NOV was on our own inventory which is expected to go to a steady state number of about 90% in the next quarter.”
See the full cited Management analysis of Eternal
How durable is the business?
Quick commerce revenue share has surged to 70.8% of adjusted revenue as the business transitioned to an inventory-led model (80% of NOV now on own inventory). Growth remains explosive at 137% YoY in Net Order Value (NOV). (1 expanding)
“In most of the Tier 1 markets, which is the metros, we have largely maintained our share of NOV, and we know that now there is competition in almost all of the cities.”
The segment has expanded significantly following the acquisition of movie and event ticketing businesses, growing 95% YoY in order value. It is being positioned as a high-value platform for premium customers. (1 expanding)
“Going-out is now a INR 8,000 crore annualized NOV business... offering large going-out use cases including dining-out, movies, sports, concert ticketing etc. on a single app.”
See the full cited Business Model analysis of Eternal
Where does growth come from?
Quick commerce (Blinkit) revenue growth is explosive, significantly outpacing food delivery and now contributing nearly half of the total B2C Net Order Value (NOV). The transition to an inventory-led model is accelerating revenue recognition. (5 accelerating across 5 signals, 2 leading indicators)
“Quick commerce Adjusted Revenue Q3FY26 12,256 YoY change 776.1%”
Store sizes are increasing across the board to accommodate wider product assortments, leading to higher capital expenditure (capex) per store. (1 new trend, 1 steady across 2 signals, 1 leading indicator)
“there is some increase in per store's square foot size... we are investing a lot more in automation now.”
See the full cited Future Growth analysis of Eternal
What could break the thesis?
The risk is intensifying as management admits to a 4x year-on-year increase in marketing spend and plans to keep these levels elevated to acquire new users, prioritizing growth over immediate EBITDA break-even. (5 intensifying, 1 high-severity)
“Now you're saying that the 100% YoY growth is contingent upon competition not staying irrational. I just wanted to tie up that guidance that you're saying that if competition is not irrational, it's only then you'll open 3,500 to 4,000 stores and only then you'll achieve 100% YoY growth.”
Losses in this segment are intensifying. Adjusted EBITDA loss increased to INR 63 crore this quarter from INR 54 crore in the previous quarter as the company continues to invest in category creation and the new 'District' app. (1 intensifying)
“Overall, there's definitely an impact of competition and it impacts our margins, it impacts our top-line growth, it impacts our store expansion plans and various other things... we did drop our delivery charges in some markets because we saw some impact.”
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