Eternal Ltd's Strategic Transformation: A Bold Bet on India's Digital Commerce Future

In 2025, Eternal Ltd (formerly Zomato) has emerged as a fascinating case study in digital transformation. What was once primarily a food delivery platform has evolved into a multi-vertical digital commerce ecosystem with significant implications for India's e-commerce landscape. This strategic diversification presents both exciting opportunities and formidable challenges for investors.

Let's break down Eternal's strategic moves and assess their implications for long-term investors:

1. Core Food Delivery: A Strong Foundation with Margins Improving
Eternal's food delivery business remains the company's most mature and profitable segment, commanding a 55% market share in India's food delivery sector. With an impressive 19% operating margin, the company has implemented cost optimization strategies through AI-driven algorithms for route planning and delivery partner allocation. The Zomato Gold loyalty program is also proving effective in enhancing customer retention and repeat orders.

What's particularly encouraging is Eternal's approach to discounting—focusing these incentives on new users while preserving margins for returning customers. This strategy, combined with quality assurance measures that have led to the delisting of over 19,000 low-rated or unhygienic restaurants, is improving consumer trust and reducing refund rates.

2. Blinkit: The High-Growth Quick Commerce Bet
Blinkit represents Eternal's most ambitious foray into the quick commerce space. With a 35% market share in this hyperlocal delivery segment, the business has seen impressive growth, with 526 dark stores by the end of 2025 and plans to expand to 700+ by FY26. The transition from a marketplace model to an inventory-led model gives Eternal greater control over pricing and margins, though it does introduce new risks related to inventory obsolescence and working capital.

What's fascinating to watch is how Blinkit is outperforming Zomato in terms of growth, with a 127% year-over-year increase in net order value. This marks a significant shift in Eternal's business model, with quick commerce becoming a key driver of growth.

3. Hyperpure: The B2B Supply Chain Challenge
Hyperpure serves as the backbone of Eternal's ecosystem by supplying fresh ingredients and kitchen staples to restaurants and Blinkit's dark stores. While the segment reported FY25 revenue of ₹6,196 crore (up 95% YoY), it also showed an adjusted EBITDA loss of ₹43 crore. This highlights the challenges of operating in a credit-based model that exposes the company to delayed payments and rising write-offs.

However, Hyperpure's strategic importance cannot be understated. It enhances internal utilization through Blinkit and supports ESG-compliant sourcing for premium chains. The company is exploring farm-direct sourcing and sustainable supply chain practices to improve margins and appeal to environmentally conscious customers.

4. Zomato Live/District: The Lifestyle Commerce Experiment
Eternal's foray into event discovery and ticketing through the District App represents its long-term vision to build a lifestyle commerce platform. Acquired for ₹2,014 crore from Paytm in March 2024, District reported Q4 FY25 revenue of ₹737 crore (up 186% YoY) and 1.2 crore+ monthly transactions. The segment is still in its early stages, operating in select cities and facing significant competition from BookMyShow, which controls ~90% of the online ticketing market.

Eternal is leveraging its Zomato Gold program to offer early access and exclusive event benefits, aiming to drive app engagement and revenue. Strategic initiatives include partnerships with local creators, curated events, and bundled food-event experiences.

Competitive Positioning and Market Dynamics
Eternal faces competition from Swiggy's Instamart, Zepto, and other players such as BigBasket and Amazon. However, Eternal's early mover advantage, established supply chain infrastructure, and efficient delivery network have allowed it to maintain a leading position. According to data from JM Financial Ltd., Blinkit, Instamart, and Zepto together control approximately 88% of the quick-commerce market share in India, with Blinkit leading the segment since its acquisition by Eternal in 2022.

What's particularly encouraging is that Eternal's stock has responded positively to these developments, with a 15% jump following the announcement of strong quarterly results. The company's market valuation has been bolstered by improved margins, aggressive expansion into new cities, and strategic optimization of delivery zones and logistics.

Challenges and Growth Levers
Despite the promise of these diversified initiatives, Eternal faces several challenges:
1. High capital intensity in Blinkit
2. Margin pressures in Hyperpure
3. Market saturation in food delivery
4. Internal cannibalization as Blinkit encroaches on food delivery use cases

However, Eternal is leveraging AI and logistics technology to optimize costs and improve delivery efficiency. It is also expanding into Tier-3 and Tier-4 markets with low-cost delivery models and exploring ad monetization across all platforms.

The company's long-term vision includes transforming Blinkit into a ₹10,000–₹15,000 crore topline business with 5–7% EBITDA margins and positioning Zomato Live as a hyperlocal entertainment layer. Management remains confident in the company's ability to execute its growth strategy and is committed to aggressive infrastructure investment in Blinkit and digital transformation across all segments.

Investment Perspective
For investors, Eternal presents an intriguing case study in strategic transformation. The company has demonstrated its ability to execute complex operations at scale while maintaining profitability in its core business. The quick-commerce segment, while still unprofitable, shows strong growth potential and could become a significant contributor to the bottom line in the coming years.

The key will be watching how Eternal balances its expansion ambitions with financial discipline. The company has shown signs of improving profitability, with analysts suggesting that losses for Blinkit and Instamart may have already peaked. This is a critical inflection point for the sector.

While the risks are real—particularly the high capital intensity of the quick-commerce segment and the need to continue optimizing its cost structure—the rewards could be substantial if Eternal successfully executes its vision.

Given the projected growth of the Indian quick-commerce market to $100 billion by 2030 and Eternal's leading position, the company is well-positioned to benefit from this expansion. However, the company must continue to demonstrate its ability to scale efficiently and adapt to market dynamics.

For investors willing to take a long-term view, Eternal offers an exciting opportunity to participate in India's digital commerce revolution. The company's ability to improve margins, scale efficiently, and adapt to market dynamics will be critical to its continued success.