Eternal Limited, formerly known as Zomato Limited, raised its long-term guidance for its quick commerce segment from a range of 5-6% to 6% during its Q1FY27 earnings conference call held on July 22, 2026. The upward revision reflects increased operational efficiency and higher margin visibility driven by strategic capital expenditures and larger store sizes. This development signals growing confidence in the sustainability of the business model amidst a competitive landscape that management describes as increasingly predictable.

The earnings call was moderated by the company’s management team, including Chief Executive Officer Albinder Singh Dhindsa, Chief Financial Officer Akshant Goyal, and Head of Corporate Development Kunal Swarup. The discussion focused on the financial performance of Q1FY27, with particular emphasis on the quick commerce platform Blinkit, food delivery operations, and emerging ventures like Bistro and District. The transcript was filed pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Quick Commerce Strategy and Competition

Management highlighted that the first quarter of FY27 represented the peak of competitive intensity in the quick commerce sector. Albinder Singh Dhindsa noted that while competition remains high, it has become more predictable, primarily manifesting as subsidies on grocery products and delivery fees. He argued that pricing-led growth requires sustained cash burn and creates a systemic trap for competitors who cannot easily exit without losing customers acquired through discounts. Eternal’s strategy focuses on supply creation and infrastructure growth rather than discounting, which management believes is unsustainable.

Akshant Goyal added that investments in capex per store have led to increased efficiency. The company is opening larger stores, which allows for better assortment and throughput. Despite this, the net average order value (NAOV) in Blinkit has remained flat year-on-year. Goyal explained that NAOV is an outcome of category mix and product assortment, not a primary driver. The focus remains on order volume growth and maintaining profitability at current NAOV levels. Seasonality may cause slight fluctuations, with NAOV potentially climbing in Q3.

Key Operational Metrics

Food Delivery and Emerging Businesses

In the food delivery segment, Eternal reported an increase in monthly transacting users (MTUs), driven by both new user acquisition and higher frequency among existing customers. Akshant Goyal clarified that there is no overlap between the food delivery business and the Bistro venture, which operates as a separate entity. The company is adding approximately 10 kitchens per quarter for Bistro, focusing on operational efficiency and menu optimization before accelerating expansion. Management noted that older kitchens are showing progress in throughput and profitability.

Regarding competition from platforms like Toing and Ownly, Goyal stated that Eternal has defended its market share by remaining price competitive in specific markets. An example cited was reducing the eligibility threshold for free delivery for gold members from ₹199 to ₹99, lowering costs for customers seeking low-value orders. The restaurant count saw a slight dip due to external factors like LPG issues affecting some establishments, rather than strategic rationalization.

Financials and Capital Allocation

Management addressed questions on capital expenditure, noting a lumpy investment pattern. While the typical capex per store is guided at ₹2.5 crore, actual quarterly spend can vary significantly due to warehousing investments. Akshant Goyal emphasized that looking at capex over a longer period reveals a lower per-store average. The company is also seeing improvements in working capital, with net working days reducing to 14 days from an initial estimate of 18 days, driven by better inventory replenishment and supply chain throughput.

On margins, Goyal confirmed that the long-term target includes an EBIT margin of 4% and an Adjusted EBITDA margin of close to 6%. These figures account for ESOP expenses and depreciation. Inventory losses, largely driven by perishables, remain at approximately 1.8% of net order value (NOV) and are netted out of gross profit. Management does not expect material improvement in this metric as it has been asymptotic so far.

What the Numbers Show

The divergence between rising capex per store and flat NAOV highlights a strategic shift towards scale and frequency over basket size. By increasing infrastructure spend, Eternal aims to capture a larger share of wallet through daily usage rather than larger individual transactions. This approach suggests that profitability will be driven by volume efficiency and supply chain optimization rather than price increases or higher order values. The reduction in working capital days further supports improved cash flow dynamics, indicating operational maturity despite ongoing investments.

Kunal Swarup provided brief updates on other segments, noting that District is operating across five categories, with dining-out and movies being the largest contributors. The Nugget business, an enterprise AI product, remains in stealth mode with good traction but limited disclosure for now. The company expects to share more details on these ventures in future quarters.

Eternal Limited has amended its Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) to align with updated regulatory requirements. The policy, approved by the Board of Directors, aims to ensure uniform dissemination of information and prevent selective disclosure that could impact price discovery. The amended code was submitted to the stock exchanges on July 22, 2026, and has been hosted on the company's website.

The revised framework designates the Chief Investor Relations Officer (CIRO) and the Compliance Officer as key authorities overseeing the disclosure of UPSI. The CIRO is responsible for disseminating information to analysts, investors, and research personnel, while the Compliance Officer ensures necessary submissions to the Stock Exchanges. In cases of uncertainty regarding whether information constitutes UPSI, the matter must be referred to the Compliance Officer, Chief Executive Officer, or Chief Financial Officer.

Principles of Fair Disclosure

The code mandates that UPSI be preserved in strict confidentiality and shared only on a "need to know" basis for legitimate purposes. Prompt public disclosure is required once a definitive decision is made to release information that could impact the company's share price. The company must take reasonable steps to ensure the accuracy of information before dissemination.

To avoid selective disclosure, UPSI must be disseminated universally to all stakeholders through Stock Exchanges and the company's official website. If any selective disclosure occurs inadvertently, the company is required to take corrective action, including informing the Stock Exchanges to make the information publicly available.

Engagement with Analysts and Investors

The policy stipulates that only generally available information should be provided to analysts, research personnel, and institutional investors. To ensure uniformity, the company encourages the presence of more than one representative during such meetings. Audio and video recordings of quarterly earnings calls and other interactions must be posted on the company's website within the statutory time limit.

If UPSI is unintentionally shared during any meeting, the company must treat it as a selective disclosure and promptly make the information generally available. The policy also outlines procedures for responding to queries on news reports and verifying market rumors, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Enforcement and Compliance

Violations of the Fair Disclosure Code by Designated Persons, including their Immediate Relatives, may result in penal action, disciplinary measures, or termination of employment. The company reserves the right to initiate action under applicable laws, which does not preclude SEBI from imposing monetary penalties or other sanctions. The Board retains the authority to review and amend the code periodically to reflect changes in statutory or regulatory requirements.