July 22 (Reuters) – Indian food and grocery delivery firm Eternal reported a nearly four-fold rise in first-quarter profit on Wednesday, but missed analyst estimates as intense competition and continued investment in quick-commerce business Blinkit weighed on profitability.
The Gurugram-based company, which also operates food-delivery platform Zomato, posted a consolidated net profit of 920 million rupees ($9.53 million) for the quarter ended June 30, below analysts’ estimate of 2.58 billion rupees, according to LSEG data.
Net profit was 250 million rupees a year earlier.
Shares of Eternal turned volatile after the results, falling as much as 3.82%, before reversing course to close about 1% higher.
Eternal’s results come as investors assess whether India’s quick-commerce boom can continue delivering rapid growth while becoming more profitable, amid aggressive expansion by rivals including Swiggy Instamart, Zepto, Flipkart Minutes and Amazon Now.
The company said competitive intensity remained high but had become more predictable, adding that it continued to focus on expanding its assortment, geographic footprint and supply-chain infrastructure rather than competing primarily on price.
Analysts had expected Eternal’s food-delivery business to benefit from healthy order demand, higher advertising and platform-fee monetisation and operating leverage, while Blinkit was expected to sustain strong growth through higher order volumes and continued expansion of its dark-store network despite intense competition.
Revenue for the quarter ended June 30 rose more than 2.5 times to 202.11 billion rupees, compared with analysts’ estimate of 204.39 billion rupees, according to LSEG data.
Food-delivery net order value rose 20% during the quarter, while Blinkit’s net order value increased 86%. Blinkit added 200 net new stores, taking its network to 2,443 stores.
“Input costs across select raw materials are beginning to witness some inflationary pressure but that has not impacted production volumes or supply from brands so far,” Eternal said.
($1 = 96.5250 Indian rupees)
(Reporting by Surbhi Misra in Bengaluru; Editing by Nivedita Bhattacharjee)
