Brokerage Expects Blinkit to Outperform Instamart in June Quarter with Strong Growth and Improving Profitability
Kotak Institutional Equities has reiterated its ‘Buy’ rating on Eternal and Swiggy, expressing confidence in the long-term growth prospects of both companies. However, the brokerage believes Blinkit is likely to maintain its leadership position in India’s quick commerce market, supported by faster store expansion, stronger order growth, and improving profitability.
In its latest report, Kotak projected that Eternal is likely to deliver a stronger performance than Swiggy during the June quarter, with Blinkit expected to significantly outperform Swiggy’s Instamart business across key operating metrics.
The brokerage has assigned a fair value of ₹385 to Eternal and ₹370 to Swiggy while maintaining positive ratings on both stocks.
Blinkit Expected to Continue Strong Growth
Kotak expects Blinkit to remain the fastest-growing player in the quick commerce segment during the June quarter.
According to the brokerage, Blinkit’s Net Order Value (NOV) is projected to grow 88% year-on-year to ₹17,277 crore, significantly outpacing competitors in the market.
The company is also expected to continue expanding its dark store network aggressively by adding around 225 new dark stores during the quarter. This would take Blinkit’s total network to nearly 2,470 dark stores, further strengthening its delivery capabilities across urban markets.
On the profitability front, Blinkit’s adjusted EBITDA is expected to improve substantially to around ₹102 crore, compared to ₹37 crore reported in the previous quarter.
Kotak believes the combination of rapid expansion and improving margins positions Blinkit as the strongest player in India’s evolving quick commerce landscape.
Eternal’s Food Delivery Business Remains Healthy
Beyond Blinkit, Kotak also remains optimistic about Eternal’s core food delivery business.
The brokerage estimates Net Order Value (NOV) for Eternal’s food delivery operations will increase 18% year-on-year to approximately ₹10,581 crore.
Although food delivery margins may witness slight pressure due to higher delivery payouts, rising fuel prices, and reduced availability of delivery partners during the early monsoon, Kotak still expects the business to report a healthy EBITDA margin of 5.2%.
The brokerage noted that stable demand and operational efficiency should continue supporting growth despite temporary cost pressures.
Swiggy’s Food Delivery Business Remains Stable
For Swiggy, Kotak expects its core food delivery segment to continue delivering steady growth.
The brokerage projects Gross Order Value (GOV) to increase 20% year-on-year to ₹9,703 crore, while revenue is expected to grow 25%, supported partly by higher platform fees charged to customers.
While Swiggy’s food delivery business remains resilient, Kotak expects its quick commerce arm Instamart to trail Blinkit in terms of growth.
According to the report, Instamart’s Gross Order Value (GOV) and Net Order Value (NOV) are expected to grow 49% and 41% year-on-year, respectively.
Sequential NOV growth is estimated at 4.1%, significantly lower than Blinkit’s projected 20% quarter-on-quarter growth.
Instamart Moves Closer to Profitability
Despite slower growth relative to Blinkit, Kotak believes Instamart continues to make operational progress.
The brokerage expects the quick commerce business to achieve contribution margin breakeven during the June quarter, an important milestone in its path toward profitability.
However, Instamart is still projected to report an adjusted EBITDA loss of around ₹730 crore, although this represents an improvement from the ₹858 crore loss recorded in the previous quarter.
The narrowing losses indicate improving operational efficiency even as the company continues investing in customer acquisition, dark store expansion, and logistics infrastructure.
Kotak expects profitability to improve gradually as scale increases and operating leverage strengthens over the coming quarters.
Competition to Remain Key Focus
India’s quick commerce market has become one of the country’s most competitive consumer internet segments, with players investing heavily in expansion, technology, and customer acquisition.
According to Kotak, Blinkit’s combination of rapid execution, expanding dark store network, and improving profitability gives it a competitive advantage over rivals at present.
However, the brokerage noted that management commentary during the upcoming June quarter earnings announcements will be closely watched.
Investors are expected to focus on pricing strategies, competitive intensity, dark store expansion plans, and the pace at which companies can improve profitability while maintaining strong growth.
With Kotak maintaining its ‘Buy’ ratings on both Eternal and Swiggy, the brokerage continues to see long-term value in India’s digital commerce ecosystem.
While Blinkit currently appears best positioned in the quick commerce race, the competition between leading platforms is expected to remain intense as companies continue investing aggressively to capture a larger share of India’s rapidly growing instant delivery market.
