Blinkit eyes margin boost as it shifts to inventory-led model; targets 3,000 dark stores
Blinkit expects 1% margin improvement and better operational efficiency from its transition to an inventory ownership model, as it sets its sights on smaller cities.
Eternal's quick commerce arm Blinkit expects its transition to a complete inventory ownership model to yield margin improvements as well as operational efficiency for its brands.
"On the assortment side, nothing will change in the selection, because moving to 1P (first party) reduces the administrative and licensing burden, significantly for both us and the brands. We do expect that there will be some positivity in terms of operational metrics around availability, fill rates that will improve on the platform," shared Eternal executives in a post-earnings call with analysts.
Quick commerce market leader Blinkit plans to transition its business from a marketplace model to an inventory ownership model over the next two to three quarters. This primarily means that Blinkit would take on the load of all products sold on the platform on its books instead of operating as a marketplace connecting buyers and sellers.
A direct ownership of inventory would give the platform more leverage on margins as well as greater flexibility on the expansion and distribution of dark stores. It expects to see about a 1% point margin expansion over time from the transition, CFO Akshant Goyal shared in the quarterly shareholder letter.
The transition would also result in a shrinkage in Hyperpure's non-restaurant business, as most of its B2B buyers were sellers on the Blinkit platform. Moreover, it further expects working capital to increase in the quick commerce business as it starts owning inventory.
The Deepinder Goyal-led company capped its foreign shareholding at 49.5% after a shareholder resolution earlier this year. As of quarter end, its foreign shareholding stands at about 43%.
The company's focus on an inventory model suggests renewed focus on profitability, especially in the cash-intensive and cut-throat quick commerce business.
Blinkit added 243 net new stores this quarter, taking its store count to 1,544 stores by June end. It plans to outline its larger target of 3,000 stores after closing its previous target of 2,000 dark stores by the end of this calendar year.
The company also outlined the promising opportunities for quick commerce beyond the top 15 cities, with a small difference in average order values paving the way for better margins, considering the lower cost of operations in smaller cities.
Despite being weighed down with heavy expenditure associated with store expansion and seasonality, the segment saw its profitability improve.
"Directionally, the margins have improved from -2.4% to -1.8% in this quarter. And we expect that trajectory to continue, subject to competitive intensity remaining the same," said Goyal.
"We see an influx of new players in this segment every now and then, and we see varying aggression by existing competitors depending on their balance sheet and near-term growth objectives. Under no circumstances will we let go of our market position here, and lose sight of the size of the prize in the long term," stated Blinkit CEO Albinder Dhindsa in the shareholder letter.
On a consolidated level, Eternal reported Rs 7,167 crore in operating revenue for Q1 FY26 compared with Rs 4,206 crore in the same period last year, particularly helped by Hyperpure and Blinkit's growth.
During the same period, it reported a net profit of Rs 25 crore—a 90% drop compared with Rs 253 crore in Q1 FY25, as a slowdown in the food delivery segment and customer acquisition investments in Blinkit continued to weigh on its bottom line.
Edited by Jyoti Narayan