Blinkit Extends Its Lead: Why Kotak Is Bullish on Eternal Despite Margin Pressure

Kotak Institutional Equities expects Eternal to post a stronger June quarter than Swiggy, with Blinkit maintaining its lead in quick commerce through rapid expansion, strong order growth, and improving profitability.

India's quick commerce battle is becoming less about who delivers groceries the fastest and more about who can grow without sacrificing profits. While competition continues to intensify, Kotak Institutional Equities believes one company is steadily widening its lead.

The brokerage has reaffirmed its 'Buy' recommendation on both Eternal and Swiggy, but its outlook suggests Blinkit remains the standout performer in the rapidly expanding quick commerce space.

Kotak expects Eternal to report a healthy June quarter, led by consistent growth in its food delivery business. Although the business may face temporary pressure from higher delivery payouts, rising fuel prices, and monsoon-related supply constraints, it is still expected to maintain solid operating margins.

Blinkit, however, is where Kotak sees the strongest momentum. The brokerage expects the platform to post robust growth in net order value while continuing its aggressive expansion strategy with nearly 225 new dark stores added during the quarter. More importantly, Blinkit's profitability is expected to improve significantly, reflecting a business that is growing while becoming more operationally efficient.

Swiggy is also projected to deliver steady growth in food delivery, supported by healthy order volumes and higher platform fees. Its quick commerce arm, Instamart, is expected to continue expanding, but at a slower pace than Blinkit. Even so, Kotak believes Instamart is moving in the right direction, with contribution margins expected to reach breakeven despite ongoing EBITDA losses.

For investors, the upcoming quarterly results could offer more than just numbers. Management commentary on pricing, competitive intensity, expansion plans, and the journey toward profitability may shape how the market views India's quick commerce leaders over the coming quarters.

As the race evolves, speed alone is no longer enough. The companies that can balance rapid expansion with sustainable profits are likely to define the next phase of India's quick commerce story and for now, Kotak believes Blinkit remains the one to beat.