Parent company of Zomato, Eternal, sees 78% decline in Q4 PAT to Rs 39 crore

Eternal, the parent company of popular brands such as Zomato and Blinkit, faced a significant 78% decrease in its net profit for the January-March quarter, dropping to Rs. 39 crore primarily due to ongoing losses in its quick commerce sector. Despite this decline, the company remains dedicated to capturing a larger market share in the quick commerce sector, focusing on long-term growth rather than immediate profits.

CEO Deepinder Goyal highlighted the company’s commitment to prioritizing long-term growth in the quick commerce sector. This approach involves not allowing near-term profit goals to hinder the pursuit of market share in this rapidly evolving segment of the market. To align with this strategy, Eternal made the decision to discontinue its short-lived 15-minute food delivery service, Quick, and homely meals service called Everyday. Goyal emphasized that these services did not show a clear path to profitability without compromising the customer experience.

Despite the overall decline in net profit, Eternal’s food and grocery delivery segment saw modest growth in the March quarter. Goyal attributed this growth to weak discretionary spending trends and the increasing impact of quick commerce on both operational aspects and consumer demand. The company’s operating revenue saw a notable 64% increase year-on-year, reaching Rs. 5,833 crore, mainly driven by Blinkit. Blinkit has emerged as a strong competitor to Zomato in terms of gross order value (GOV), indicating its significant contribution to Eternal’s revenue growth.

The company’s decision to focus on capturing market share in quick commerce highlights its long-term vision and growth strategy. By strategically prioritizing market expansion over immediate profitability, Eternal aims to solidify its position in the quick commerce sector, which is experiencing rapid changes and evolving consumer demands. While the decline in net profit for the January-March quarter reflects ongoing challenges in the quick commerce segment, Eternal’s commitment to long-term growth remains unwavering.

Eternal’s resilience in the face of profitability challenges demonstrates its determination to adapt to market dynamics and prioritize future growth opportunities. The company’s decision to streamline its services and focus on sustainable growth underscores its strategic approach to navigating the evolving landscape of the food and grocery delivery industry. By embracing a long-term growth mindset, Eternal positions itself to capitalize on emerging market trends and secure a competitive edge in the dynamic quick commerce sector.