Eternal , the parent company of popular platforms Zomato and Blinkit, has reported a significant expansion in its workforce, more than doubling its employee count to 16,375 in FY25. This surge has propelled the company beyond Tata Consumer Products, which currently employs 10,595 individuals.

Rapid Expansion and Its Drivers

The substantial growth in Eternal's workforce is attributed to several factors:

• Expansion in the quick-commerce sector
• Growth in the going-out business segment
• Recent acquisitions in the entertainment ticketing industry

Financial Implications of Workforce Growth

The company's employee-related financials have seen notable changes:

• Employee benefit expenses increased by 54% to ₹2,558.00 crore
• Share-based payments saw a significant jump of 55%, reaching ₹798.00 crore

Compensation Trends

Despite the overall increase in expenses, there are interesting trends in employee compensation:

• Average pay for non-managerial employees decreased by 23-26%
• This decline is due to a higher proportion of lower-salaried staff in customer support and operations roles
• Independent directors' compensation increased fourfold to ₹1.00 crore
• CEO Deepinder Goyal continues to waive his salary until March 2026, demonstrating a commitment to the company's growth

Employee Turnover

Eternal has experienced an increase in employee attrition:

• The attrition rate rose to 44% from the previous 37%
• This increase is attributed to internal transfers and higher turnover in frontline roles

Analysis

The contrasting trends of workforce expansion and declining average pay highlight Eternal's strategic focus on rapid growth, particularly in operational areas. While the company is investing heavily in its workforce, the shift towards a larger proportion of frontline staff has impacted the overall average compensation.

The significant increase in share-based payments suggests a strategy to align employee interests with company performance, potentially offsetting the decline in average cash compensation for some employees.

The rise in attrition rates, while concerning, is not uncommon in fast-growing companies with a large frontline workforce. However, it may present challenges in maintaining operational stability and could lead to increased training and recruitment costs.

Eternal's ability to manage these workforce dynamics while continuing its expansion will be crucial for its long-term success in the competitive quick-commerce and food delivery markets.

Eternal Limited (formerly Zomato Limited) has reported robust performance in its quick commerce segment and early signs of recovery in food delivery for the first quarter of fiscal year 2026. The company's management shared these insights during their Q1FY26 earnings conference call.

Quick Commerce Surge

Blinkit, Eternal's quick commerce arm, demonstrated impressive growth with Gross Order Value (GOV) exceeding ₹5,000 crore and Monthly Transacting Users (MTU) surpassing 15 million. The segment's adjusted EBITDA margins improved from -2.4% to -1.8% quarter-on-quarter, with some mature markets achieving 2.5% margins.

Albinder Singh Dhindsa, CEO of Blinkit, highlighted the company's expansion plans, stating, "We currently operate over 1,500 dark stores and have visibility to expand to 3,000 stores." This aggressive growth strategy underscores Eternal's commitment to strengthening its quick commerce presence.

Inventory Ownership Transition

In a significant move, Eternal plans to transition most of its inventory to first-party ownership within two to three quarters. Akshant Goyal, CFO of Eternal Limited, explained, "We expect this transition to result in a 100 basis points margin improvement." This shift is anticipated to streamline operations and enhance profitability.

Food Delivery Recovery

While quick commerce showed stellar performance, the food delivery segment also displayed encouraging signs. The company reported improved app engagement and higher customer return rates in the first three weeks of the quarter, indicating a potential turnaround after several quarters of subdued growth.

Akshant Goyal expressed optimism about the food delivery segment, stating, "We believe that food delivery growth has bottomed out, and we expect to see better growth from here on."

Market Performance

Delhi, a mature market for Eternal's quick commerce business, demonstrated robust growth with a 70% year-on-year increase. This performance in a well-established market suggests strong potential for sustained growth in the quick commerce segment.

Looking Ahead

Management expects margin improvements in quick commerce, contingent on stable competitive conditions. The company remains focused on maintaining its leadership position while providing the best service to customers.

Eternal Limited's Q1FY26 results reflect a company in transition, with strong growth in its quick commerce segment and nascent signs of recovery in food delivery. As the company continues to expand its quick commerce operations and optimize its inventory management, investors will be watching closely to see if these strategies translate into sustained growth and improved profitability across all segments.

Financial Results

The company's strategic moves in inventory management and expansion of dark stores, coupled with the early signs of recovery in food delivery, position Eternal Limited for potential growth in the coming quarters. However, the management remains cautious, acknowledging the competitive nature of the market and the need to adapt to changing circumstances.