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Five strategic developments from Eternal’s Q2FY27 earnings call

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Eternal is building its businesses around owning inventory, stores and delivery networks. It argues that this will protect Zomato and Blinkit from artificial intelligence (AI) shopping agents and help Blinkit take on e-commerce, according to its shareholder letter and earnings call on October 21. Eternal is also moving District, its going-out business, into a separate subsidiary.

Here are five strategic developments from the call:

1. Eternal says owning delivery protects Zomato and Blinkit from AI agents

“An agent can place an order, but it cannot own the outcome,” founder Deepinder Goyal wrote in the letter. “Only whoever runs the fulfilment can.”

When an order goes wrong, customers expect “one party to fix it within minutes, and today that is us,” Goyal wrote. He argued that AI agents can bypass platforms that only list other companies’ supply but cannot bypass those that coordinate restaurants, dark stores and delivery partners in real time.

Goyal placed Zomato and Blinkit in “the low-risk zone” for agentic commerce. More than 65% of Zomato app opens are by users browsing without knowing what to order, while repeat orders are “in low single digits” on both apps, he said.

“In India, the agentic commerce adoption is, I think, close to zero,” chief financial officer Akshant Goyal said on the call. Eternal is “friendly” to agent traffic, which remains “negligible”, and has no plans to block it, Eternal’s Kunal Swarup said. Zomato’s own AI chatbot has seen little uptake, he said, because “people still want to browse and order.”

In April, Goyal dismissed the risk of AI disruption, writing that “AI will not move food through traffic or stock shelves”, while Zomato built infrastructure for agentic commerce. Zomato launched a server in November 2025 that lets users order through ChatGPT and Claude. Eternal expanded its partnership with OpenAI in February. This quarter’s letter sets out which of Eternal’s businesses could be disrupted by AI agents.

2. Blinkit owns its stock and will not launch private labels

“We don’t want to become both the platform and a competitor to the brands on the platform,” Eternal Group CEO Albinder Dhindsa said in the letter.

The shelf space Blinkit would spend promoting its own label “can instead help other brands grow on our fair and neutral platform,” Dhindsa said. This “allows us to earn advertising revenue as the brands grow.” Private labels are not something Eternal has “competence in,” Akshant Goyal said on the call.

About 90% to 95% of what Blinkit sells is now its own inventory, up from around 80% in October 2025, as we reported then. Blinkit has reached a “steady state” in this regard and does not expect inventory ownership to tie up more working capital, Akshant Goyal said. In July, he said Blinkit loses about 1.8% of its order value to inventory losses, mostly on perishables such as fruits and vegetables.

3. Blinkit is expanding into smaller cities to take on e-commerce

“Competition is more predictable now,” Akshant Goyal said on the call. “That provides an opportunity for us to become more aggressive on infrastructure expansion.”

In July, Dhindsa called the June quarter “the peak of competitive intensity that we have seen to date” and said rivals were relying on discounts. Eternal raised its capital spending estimate per store to Rs 2.5 crore from Rs 1 crore and shifted to larger stores. It has now raised its store targets as well.

Eternal expects to cross 3,500 Blinkit stores by March 2027 and reach about 5,000 by March 2028, most of them in smaller cities, according to the letter. In April, it had projected 3,000 stores by March 2027. In July 2025, Eternal said that “a majority of our business is still from the top 20 cities.”

“Paybacks are extremely good in these markets,” Akshant Goyal said. “These markets are less competitive. And I think going in first does give one an advantage of locking in the early users of those markets.”

Much of what Blinkit sells in smaller cities “is either not available locally or takes days to arrive through alternative channels like e-commerce,” Dhindsa said in the letter. Blinkit wants “to bring most of what a household buys within 10 minutes,” he said. Its catalogue in Delhi NCR grew from about 80,000 products in March to about 1,00,000 and now includes air conditioners.

4. District will move into a separate subsidiary as Eternal flags its exposure to AI agents

“District sits in the medium-to-high risk zone,” Goyal wrote in the letter, since AI agents can book the same restaurant tables and event tickets through other channels.

Eternal’s board approved the transfer of its going-out business to its wholly owned subsidiary, Zomato Entertainment Private Limited, on October 21, according to its financial results. “Agentic commerce could disrupt parts of this business over time, and we are building with that in mind,” Akshant Goyal said in the letter.

In July, Eternal said District would have “a smaller customer base” and operate in fewer cities than Zomato and Blinkit. In January, it said it would double down on District despite rising losses and projected that the business would break even within four to six quarters. Akshant Goyal said District remains on track. It lost Rs 64 crore in the quarter.

5. Zomato’s profits fund Blinkit’s expansion and Eternal’s AI products

“We feel that we can drive more growth in absolute adjusted EBITDA by investing more in growth rather than optimizing for margins,” Akshant Goyal said on the call, referring to earnings before interest, tax, depreciation and amortisation (EBITDA).

Eternal expects Zomato’s margins to remain “flattish” for the next one to two years as it reinvests in growth, he said. Competition in food delivery increased this quarter, “partly also driven by Zomato,” he said.

In July, Goyal said Swiggy’s Toing and Rapido’s Ownly had a “limited” impact on Zomato. Asked this quarter about new companies entering food delivery, Akshant Goyal said, “It doesn’t make sense to us at all as well. We are equally surprised.” In April, Eternal said it was raising Zomato’s platform fee for all users to fund discounts for select customers.

“Our cash balance and profits from both food delivery and quick commerce businesses, also let us fund this pace of growth comfortably,” Akshant Goyal said in the letter. Eternal’s cash balance fell by Rs 1,813 crore to Rs 16,475 crore during the quarter, mainly because Blinkit built inventory ahead of the festive season.

Eternal also plans to launch Dark.ai, a privacy-focused AI assistant, globally by the end of 2026. “It is more like a zero one bet at this point,” Akshant Goyal said on the call. Asked whether Eternal leans towards technology over new services, he said, “Yeah, I think so.”