(Reuters) -Indian online delivery firm Eternal reported a more than 70% rise in quarterly revenue on Monday, as its quick commerce order value surpassed that of its food-delivery business for the first time, boosting earnings.
Its shares rose as much as 7.5% to 277 rupees after the results, hitting their highest level since February 3, before closing 5.64% higher.
India’s booming quick-commerce space has turned into a battleground, with Eternal, Swiggy, and Zepto [KIRK.NS] vying for market share.
Eternal’s quick commerce platform, Blinkit, which promises everything from salt to iPhones in under 10 minutes, is widely seen as the front-runner by analysts despite growing pressure from players such as BigBasket, Flipkart, and Amazon.
The company’s food delivery business, Zomato, is its profitable arm and has historically contributed the larger share of revenue, but Blinkit is closing the gap fast.
In the June quarter, Blinkit’s net order value surged 127% to 92.03 billion rupees ($1.07 billion), overtaking Zomato’s for the first time, the company said.
That powered a surge in Eternal’s revenue from operations to 71.67 billion rupees, compared to 42.06 billion rupees a year earlier.
However, its consolidated net profit slumped 90% to 250 million rupees, weighed by higher costs at Blinkit.
Quick commerce firms have been burning cash on steep discounts, free deliveries, and rapid expansion of so-called dark stores to stay ahead of rivals.
Eternal spent 3.1 billion rupees in capital expenditure to expand Blinkit’s store network during the quarter.
While its adjusted core profit and quick commerce margins declined year-on-year, they improved sequentially.
Eternal said Blinkit’s margins have likely “hit bottom” and could improve if competition doesn’t heat up further.
“In fact, even absolute losses should start shrinking from here,” the company said.
($1 = 86.2775 Indian rupees)
(Reporting by Ananta Agarwal and Chandini Monnappa in Bengaluru; Editing by Sumana Nandy and Mrigank Dhaniwala)
