Eternal Ltd.Margin Guidance Raised Amid Peak Competition

Eternal Ltd. delivered robust Q1 FY27 performance with Blinkit achieving 21% quarter-on-quarter NOV growth while adding approximately 200 stores.

Management raised long-term EBITDA margin guidance to 6% from the previous 5-6% range, with EBIT margins targeted at 4% including ESOP and depreciation. This upgrade reflects improved operational efficiency from higher capex investments and larger store formats. Working capital improved to 14 days from 18 days, moving toward the 12-day steady-state target. The company characterized Q1 as peak competitive intensity, with competition now more predictable and primarily manifesting through unsustainable customer subsidies.

Management emphasized their differentiation as a supply-creation business rather than pursuing discount-led growth, noting that older customer cohorts now spend 3x versus three years ago. Monthly transacting users exceeded 30 million. The company maintains an ROCE-driven investment framework, accepting metric variability while prioritizing returns. Geographic expansion into smaller profitable cities and assortment deepening remain key growth drivers, with Bistro expanding at approximately 10 kitchens quarterly.