Eternal pushes ahead as Swiggy charts a different course in a tough market

BENGALURU: Eternal Ltd and Swiggy Ltd have taken different approaches to growth in quick commerce and food delivery as Amazon India, Flipkart and other companies intensify competition.

Eternal’s Blinkit is accelerating store additions and expanding into smaller cities, while Swiggy’s Instamart is focusing on efficiency in existing markets, their September-quarter results show. The companies also differ on private labels while Swiggy is using its standalone budget-meal app Toing to attract food-delivery customers.

Blinkit’s net order value (NOV) grew 79.3% year-on-year to ₹20,940 crore, against 34.8% growth to ₹6,594 crore at Instamart. Blinkit reported positive adjusted Ebitda of ₹184 crore, while Instamart posted a loss of ₹895 crore.

“The differences in execution could further widen the market-share gap between the two companies in quick commerce,” said Satish Meena, an analyst at Datum Intelligence. “Questions about Swiggy’s execution pace are coming into focus again.”

Blinkit led quick-commerce order volumes in September with a 40.2% share, followed by Zepto at 23% and Instamart at 13.6%, according to Datum Intelligence. Flipkart Minutes had 11%, Amazon Now 7.4% and BigBasket 4.6%.

Competition is intensifying, with Amazon expanding its Amazon Now quick-commerce service and Flipkart preparing to challenge food-delivery platforms. Logistics aggregator Shiprocket has also entered food commerce, offering restaurants an alternative to third-party aggregators.

Swiggy’s weaker-than-expected performance sent its shares lower on 23 October, wiping out almost ₹9,000 crore in market value in a single session. Eternal’s market capitalization stood at roughly ₹3 lakh crore, around five times that of Swiggy’s.

Expansion strategies

Eternal added 308 net Blinkit stores in the quarter, taking its network to 2,751. It aims to exceed 3,500 stores by March 2027 and reach 5,000 by March 2028. In its shareholder letter, Eternal said stores in smaller cities and newer categories were on track to meet margin and payback targets. New stores in contested markets met return thresholds despite competitive pressure.

New stores in smaller cities reached 1,000 daily orders in a timeframe similar to metro stores, with average order values at 85-90% of metro levels and comparable customer retention.

Eternal has rejected a broad private-label strategy for Blinkit, arguing that developing and marketing its own brands could put it in competition with brands on its platform. Instead, it is focusing on expanding product choice and helping partners grow.

Swiggy is taking a different approach through Instamart’s Switch proposition, which combines private brand Noice, fresh-produce offering Nectr and partnerships with about 400 brands. Noice products feature in more than one in eight orders and Swiggy says customers who buy them show 15 percentage points higher retention.

Swiggy added 69 net dark stores in the quarter, taking Instamart’s network to 1,240 across 133 cities. The company plans to expand in existing markets rather than enter new ones.

“We do not have a near-term expectation to increase the geographical coverage,” chief financial officer Rahul Bothra said on an earnings call.

Instamart’s NOV grew 13.4% sequentially, up from 4% and 2.5% in the previous two quarters. Orders rose 29.3% year-on-year to 130 million, but adjusted Ebitda losses widened by ₹118 crore sequentially to ₹895 crore.

Motilal Oswal cut its estimate for Swiggy’s FY26-FY30 NOV compounded annual growth rate to 32% from 38%, citing Instamart’s slower growth relative to Blinkit. It said weaker growth could delay operating leverage and extend the period of losses.

Food delivery divergence

In food delivery, Zomato is growing faster and has higher adjusted Ebitda margins than Swiggy. Swiggy is betting that Toing, its standalone app for affordable meals, can attract customers for whom price is a barrier.

Eternal’s food-delivery NOV grew 21.5% year-on-year to ₹11,445 crore, generating adjusted Ebitda of ₹627 crore at a margin of 5.5% of NOV. Swiggy’s food-delivery gross order value rose 17.7% to ₹10,054 crore. Adjusted Ebitda reached a record ₹341 crore, with margins improving to 3.4% of gross order value.

Two-thirds of Toing’s new users were either new to Swiggy or had been inactive for a long period. Swiggy said repeat-user unit economics had turned positive in its earliest launch cities, though monetization and cost efficiency still needed work.

“The market can expand if the right proposition offering value to consumers while being sustainable can be cracked,” chief executive officer Sriharsha Majety said on the earnings call.

Swiggy said Toing could lift food-delivery growth to 25-30% from its current guidance of 18-20%. That remains a potential upside as it works to turn early customer traction into sustained growth.

Nomura said Eternal’s plan to keep margins stable while reinvesting for growth over the next 12 months could constrain Swiggy’s margin expansion, adding to the pressure on the company to improve Instamart’s performance.