Eternal Ltd (NSE: ETERNAL) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Akshant Goyal — Chief Financial Officer
Albinder Singh Dhindsa — Founder & Chief Executive Officer, Blinkit
Kunal Swarup — Head, Corporate Development
Analysts:
Manish Adukia — Analyst
Ankur Rudra — Analyst
Swapnil Potdukhe — Analyst
Garima Mishra — Analyst
Gaurav Rateria — Analyst
Gaurav Malhotra — Analyst
Sachin Salgaonkar — Analyst
Jignanshu Gor — Analyst
Abhisek Banerjee — Analyst
Kunal Vora — Analyst
Nikhil Choudhary — Analyst
Vijit Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, a very good evening, and welcome to Eternal Limited’s Q3 FY ’26 Earnings Conference Call. From Eternal’s management team, we have with us today, Akshant Goyal; Albinder Singh Dhindsa; and Kunal Swarup.
Before we begin, a few quick announcements for the attendees. Anything said on this call, which reflects the outlook for the future, or which could be construed as a forward-looking statement, may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements.
Additionally, please note that this earnings call is scheduled for a duration of 45 minutes, and we will be starting directly with the Q&A section of the call. [Operator Instructions].
Questions and Answers:
Operator
First question is from the line of Manish Adukia from Goldman Sachs. Please go ahead.
Manish Adukia
Hi, good evening. Thank you so much for taking my questions and congratulations on a good quarter. So my first question is on the quick commerce margins or losses, and congratulations on the breakeven there. Now, in this quarter, if you look at the numbers, your gross margin didn’t really expand, store throughput was down about 6% Q-o-Q, but despite that, your contribution margin expanded 90 basis points, EBITDA expanded about 130 basis points, and all of this is while you say that the competition is irrational. Now if you assume competition remains irrational, which is what you are assuming, then why should, directionally, margins not continue to improve at the same pace as what you did in this quarter? Would love to get your thoughts on that. That’s my first question, please.
Akshant Goyal
Hi, Manish. Akshant here. So I think, yeah — I mean it’s very hard to predict the trajectory of margin, I think, which is what we have also mentioned in one of the question in the letter, in the near term. Right? So competition is not — I mean the competition intensity, even if it’s high, is not steady always. Right? So, last quarter — we did see first half of the quarter being absolutely — on our last conference call, we mentioned that the competitive intensity is now easing off and then it changed. So I think the margins is a function of various things. Competitive intensity is one of it and even that, within a quarter or even in a longer period, there are various variables, geography-specific and so on.
So yes, I think directionally, we say that margin should expand, but we’re not able to confidently say that the pace of margin expansion will be same as what happened in the last quarter because the competitive intensity was high in the last quarter and therefore going forward, it should also be the same. So, it’s, I think, a multi-variable problem with not a linear correlation with just one variable.
Manish Adukia
No. Appreciate that, Akshant. Thank you. So follow-on question then on competition. One, if you can maybe clarify, quarter-on-quarter, your store throughput was I think down about 6% or 7%. What explains that? And maybe a related question. So you’re saying — I mean, previous quarter you mentioned that you want to grow at 100% Y-o-Y or expect to grow 100% Y-o-Y at least for the next one to two years. Now you’re saying that, that 100% Y-o-Y growth is contingent upon competition not staying irrational. So I just wanted to like tie up that guidance that you’re saying that if competition is not irrational, it’s only when you’ll open 3, 500 to 4,000 stores, and only then you’ll achieve 100% Y-o-Y NOV growth. Is that understanding correct? And my first question was just on store throughput.
Akshant Goyal
That’s right.
Albinder Singh Dhindsa
Yeah, broadly that is correct. See, the way the competitive intensity affects us is in which form it comes, right? So last quarter, we saw a lot of competitive intensity get amped up because a lot of competitors went to zero — like low MOVs and zero delivery fees. But we’re also seeing a lot of discounting happen in the market. So therefore, it becomes a lot more complex for us to also be able to say that which way the things will move and how we will have to respond. But broadly, your — what you’ve said is broadly correct.
Akshant Goyal
And on store throughput, Manish, I think it’s a function of the fact that our assortment is now expanding. And I think it’s possible therefore that there are quarters when some of the store expansion — the driver of that is assortment expansion, which is not as fast-moving as some of the main head SKUs. So I think over long term we don’t see that as a concern. And I think the fact that assortment is expanding is also reflecting in our margins which were better last quarter despite the throughput being lower as you mentioned.
Manish Adukia
Got it. And just my last question on this topic. So your growth is good. You said like-for-like 130% Y-o-Y, you’re expanding margins. So where is competition showing up? I mean, as of today, it’s not really impacting you. Is that the way to read it? And what needs to change for competition to start impacting your numbers?
Akshant Goyal
No. So we are not saying that, Manish. I think — I mean there’s always a way to look at things and one can argue that in absence of irrational competition that we are pointing out, things would have been much better than what they are today. Right? So that’s also one perspective. So the competition is impacting us, but in terms of our outcomes and numbers. But it may or may not impact the decisions that we take in a particular quarter. So for example, in the last quarter, we didn’t see these freebies impacting our market share too much and hence we sort of sustained our pricing.
But as you might have seen last week, we did drop our delivery charges in some markets because we saw some impact. Right? So overall, I think there’s definitely an impact of competition and it impacts our margins, it impacts our top line growth, it impacts our store expansion plans and various other things.
Manish Adukia
Got it. Just last question before I jump back in the queue. You’ve maintained your 3 billion NOV guidance for going out in F ’30, which would imply north of 30% CAGR over the next four years. Last quarter, of course, was about 20% growth. So, one, why is the growth as low as it is right now? And two, what explains that meaningful acceleration that is being built into your guidance?
Akshant Goyal
Yeah, so I think a large part of our growth here in this business is we are expecting, going forward, it’s going to be from market share growth. Right? I think there are subsegments within District business like events and movies where we are a significantly smaller market player even now compared to our competitors. Right? So, for us, to deliver 30% CAGR over the next three, four years, it doesn’t necessarily mean that the industry has to grow by that much. I think a lot of it can also come from market share gains and that is what we are building into our plans right now.
Manish Adukia
Very helpful. Thanks a lot. I’ll jump back in the queue.
Operator
Thank you. Next question is from the line of Ankur Rudra from J.P. Morgan. Please go ahead.
Ankur Rudra
Hey, thank you. And again, nice to see a quick breakeven here. Maybe to start with, could you highlight whether the slower growth in orders this time — it seems to have slowed a bit more than your headline revenues in the quick commerce business, and it again has not been impacted by GST, is that a reflection of the more aggressive stance from a competitive perspective, we lose some share to peers?
Albinder Singh Dhindsa
Yes, some of it is an impact of that, Ankur.
Ankur Rudra
Got it. And, going forward, do you think this will normalize?
Albinder Singh Dhindsa
We have no idea. It depends on how the overall market behaves.
Ankur Rudra
Got it. Maybe Just another follow-up on a previous question. Your addition has slowed down this time, it should imply a better store vintage and the older store should ideally have better NOV per store. I think you made a comment about that. I’m just curious to see why it’s not coming up. Why the NOV or throughput per store per day is not expanding if we see a better vintage?
Akshant Goyal
Yeah. So, Ankur, that’s again a function — as I mentioned that a lot of our store addition last — not just last quarter, but last two, three quarters has been toward assortment expansion and as we now further expand the assortment, the turnover of this — the long tail is not that high as what we started the business with. So there is always that negative impact of assortment expansion on throughput that we will continue seeing in the business. And I think in this quarter, that resulted in a slight dip. I don’t think we should read too much into that at this point. We should bounce back and NOV per day per store which we believe will continue to grow.
Kunal Swarup
Also part of the impact was on account of the GST change. I think that in absence of that, that 3% impact would have been…
Ankur Rudra
Yeah, yeah, I saw that. I was hoping it’ll expand given the — it slowed down a bit. But I understand the answer. Just a couple of points on the cash flows. I can see that capex has gone up a bit this time despite fewer stores added versus last quarter and also your working capital days seem to be expanding. If you can comment on those two factors, please?
Akshant Goyal
Yeah. So, Ankur, as we mentioned in the letter, I think what we are — our framework for thinking about capex and net working capital is ROCE. Right? And it’s a young business. We don’t have a playbook for how much NWC is going to give us, what kind of ROCE, etc. So we are being open minded and first principles on this. In the past, we have shared some assumptions on what capex per store could be going forward and what our sort of net working capital days in the business could be. Broadly, I think we are hovering around the same range right now.
But, especially on capex, I think we think that it will go up on a per-store basis going forward because there’s a lot of automation opportunity here which will increase productivity. So even though we might see capex per store going up over the next few quarters, we don’t expect net working capital to be beyond that 18 days that we had shared earlier. So that should remain within the range and hence, as a consequence of that, the ROCE outcomes should still be north of 40%. I think that’s what we are solving for.
Ankur Rudra
Understood. Thank you, and best of luck.
Akshant Goyal
Thank you.
Operator
Thank you. Next question is from the line of Swapnil Potdukhe from JM Financial. Please go ahead.
Swapnil Potdukhe
Hi, thanks for the opportunity, and congrats on breaking even in the quick commerce business. My first question is with respect to your — the contribution margin expansion that happened in Blinkit. So 90 basis points improvement. This was despite 20 basis points of take rates coming off. Where exactly, if you can pinpoint, did you see a meaningful improvement or the play out within the contribution expenses — between the take rate to contribution margin expenses?
Albinder Singh Dhindsa
I think, Swapnil, it’s mostly to do with the mix change. There is this impact of seasonality also over there, and then some of the other factors also impact, like how the — what product mix we end up selling in the quarter.
Akshant Goyal
And the cost efficiencies. I think most of the benefit as you see are on the cost side below gross profit. So I think there’s no one particular factor. I think it’s largely operating leverage which is resulting in lower costs and some sort of higher productivity in the warehouses that’s resulting in the increase in margins.
Swapnil Potdukhe
Got it. And going ahead, given that you also mentioned that you have cut down your delivery fees in certain markets, so that, in my opinion, will put some pressure on your take rates. Right? So how much contribution margin expansion will realistically be possible for us to sustain, let’s say, in the next quarter or so?
Akshant Goyal
So yeah, for next quarter or even two, we don’t want to comment, Swapnil, and I think — I hope you’ll appreciate that, and we’ve mentioned that in the letter, tried to explain what are the various reasons why this might be little volatile in the short term. So very hard to talk about whether the margins will expand at all, or if they do, by how much in the next quarter.
Swapnil Potdukhe
Okay. And…
Akshant Goyal
Just to add, I think longer term, in our letter, we have mentioned that our confidence on margins going to 5% to 6% of NOV remains high, and we have shared data on a couple of cities in our business where we are already at 5% adjusted EBITDA margin. Right? So the way we think about margins is therefore, long term, we have extremely high confidence on the business model delivering the margins that we need to get to the ROCE that I mentioned.
But in the short term, we want to take the right decisions for the business and that could mean taking a margin hit if we have to do that and we are open about that. So we are not saying that that’s going to happen next quarter. These decisions are going to be tactical and taken real time and hence, a lot of it depends on how the market shapes up over the next three, six months. And that’s why the unpredictability on margin from hereon.
Swapnil Potdukhe
Got it. And can you just clarify, because there have been a few changes in the labor code this time around, and how much of those costs are already baked in, in your margins today? And coming from the two impacts essentially that I want to understand about. One is the impact because of the gig worker cost going up towards their social security benefits, and secondly because of the changes on the gratuity side for some of the fixed-term contract labor. So if you can just — if any of that is already in the margin or going ahead, we will have to face that challenge?
Akshant Goyal
So as we have mentioned in question 11, we don’t think the new labor codes impact our long-term margin guidance. That doesn’t change. As far as any potential impact on account of code on social security is concerned, we will get to know that once the rules are operationalized and notified. And from what we know today, we think the business will either be able to absorb that cost or we’ll pass it on to customers. And on your second part on gratuity and leave encashment, our assessment is right now that there’s no impact on our business on account of that. But again there are a few outstanding questions there that will get more clarity over the next few days. And if there is, then next quarter will reflect that. But I don’t expect that to be meaningful at all.
Swapnil Potdukhe
Got it. And just the last one on the going-out side, I mean our previous thought process was that the losses in that business will be around INR60 crores, INR70 crores, maybe quarterly-wise. There has been a sudden jump in this particular quarter, and against that, we didn’t have that kind of a growth as well, 20% Y-o-Y. Is there any scale-up in investments that you had done and that is going to sustain? Or, like, how should we look at that? Or was there a bunch of — some investments this quarter itself?
Akshant Goyal
Yeah, I think it’s more the latter. I think we decided to launch District Pass as a membership program, which we initially did not plan for in this quarter. And a large part of the increase in losses is on account of rolling that out. And I think that will not impact the top line numbers in this quarter, given the effect will be compounding over the next few months. But we think it’s the right step, and I think it’s going to drive multi-category usage on the app. So I think we’ll keep evaluating whether we need to continue this investment or not. But irrespective of that, as we mentioned in question 13, we expect now the losses to come down sequentially from here towards breakeven in the next four to six quarters.
Swapnil Potdukhe
Got it, Akshant. It was very clear. Thanks a lot for taking my questions, and all the best.
Akshant Goyal
Thank you.
Operator
Thank you. Next question is from the line of Garima Mishra from Kotak Equities. Please go ahead.
Garima Mishra
Thank you so much for the opportunity. First, if I refer back to your second quarter letter, you had mentioned that, for the Blinkit business, GST cuts bring down basket pricing by 3%, and this should help in higher demand. Did this play out in the manner you had envisaged in 3Q?
Albinder Singh Dhindsa
Hi, Garima. Some of it did, but there were also supply challenges because of the transition. So I think it will become more clearer over the next few quarters. It was not a resounding yes this quarter.
Garima Mishra
All right, thanks for that. And Albinder, congrats to you on your new role of Group CEO. So do you continue to lead the Blinkit business, or should we expect some internal leadership changes?
Albinder Singh Dhindsa
Garima, as we mentioned in the letter, we continue to operate like they’re operating. I think, still as a team. Akshant, Deepi, and I will continue to do whatever we were doing, including me leading the Blinkit business. So operationally nothing changes for us.
Garima Mishra
All right. Thank you and wish you the best.
Albinder Singh Dhindsa
Thanks.
Operator
Thank you. Next question is from the line of Gaurav Rateria from Morgan Stanley. Please go ahead.
Gaurav Rateria
Hi. Congrats on stellar performance this quarter. My first question is on your comment around 100% plus growth, which would be possible with 3,500 plus stores, which was probably earlier possible with 3,000 stores. Does it mean that, incrementally, whatever stores that you are likely to add will carry the lower throughput than what you were expecting earlier? And is it because the competition has been aggressive in rolling out their own stores, and hence the penetration of the number of stores has increased substantially and which brings down the throughput for you?
Akshant Goyal
Hi, Gaurav. No, I think so — I think we never mentioned that the 100% growth from here on will happen with just 3,000 stores. We don’t think that is likely, although possible. So for that to happen, we will need to open more stores, which is what we have mentioned here.
Gaurav Rateria
Okay. Okay. My second question is on your competitive intensity. I guess you did allude to some tactical interventions that you may have done during the quarter. Is it fair to say that if competition remains where it is right now, whatever interventions that you are doing is sufficient for you to hold back to your market share and deliver whatever profitability you have? Or there will be need for more interventions if the competition remains at the current levels?
Albinder Singh Dhindsa
Hi, Gaurav, I think — see, competitive intensity also tends to go up over time because the kind of competitive interventions that we are seeing, they used — they usually lead to lower ROI as you keep doing more and more of them. So we will have to respond to a fairly volatile environment. I don’t think we can just stay at the intervention and then like hope that the competition also stays at the same thing. I think people will change, they will be more competitive and we’ll have to also respond to that.
Gaurav Rateria
Got it. My last question is on how to look at the breakeven on a cash flow basis in quick commerce at the steady state margin that you are talking about on quick commerce business. What would be that converting into from a free cash flow margin perspective? Thank you.
Kunal Swarup
I think we’ve also laid out our view on how we think about return on capital here. And I think ROCE of 40% plus is how we think about.
Akshant Goyal
I think his question is that what does that mean for free cash flow margins? Right? Free cash flow over revenue?
Gaurav Rateria
Yes. Yes.
Akshant Goyal
Yeah, Gaurav, we haven’t looked at that yet, honestly. So…
Gaurav Rateria
Okay, no problem, thank you.
Operator
Thank you. Next question is from the line of Gaurav Malhotra from Axis Securities. Please go ahead.
Gaurav Malhotra
Yeah, hi. Thanks. Thanks for the opportunity. Congrats on a good set of numbers. Just couple of questions. In the shareholder letter, you mentioned that 90% you guys have shifted to inventory. So the remaining 10% which you said you will not shift, what is the assortment there? Is it like electronics, slower-moving goods, higher ASP items? What is the assortment of that 10%?
Albinder Singh Dhindsa
Gaurav, some of that is SKUs that we do want to keep on a marketplace model for different reasons, some of which are also related to they might be slower-moving, and in some cases, there is a more vibrant seller ecosystem for these SKUs, which we think they do a better job of managing inventory and managing the backend than we would be able to do that. So that’s probably the kind of SKUs that contribute to that number.
Gaurav Malhotra
Got it, got it. And just on food delivery, you did take down the delivery charges and we are seeing some obviously growth coming and picking up. But from here, do we expect growth to further accelerate or this is — it sort of will remain in this kind of ballpark?
Akshant Goyal
Hey, Gaurav. So on the growth, again we mentioned, I think in response to question seven that, long term, I think growth opportunity is pretty high, given that some of our large cities are still growing 50% to 100% year-on-year. But — sorry, Gaurav, I misunderstood. Your question was on food, right?
Gaurav Malhotra
Yeah, yeah, it was on food. It was on food.
Akshant Goyal
Yeah. So as of now, as we mentioned that we expect the growth — year-on-year growth to continue slowly trending up towards 20% is what our current sense on the market is.
Gaurav Malhotra
Got it. Okay, thank you.
Operator
Thank you. Next question is from the line of Sachin Salgaonkar from Bank of America. Please go ahead.
Sachin Salgaonkar
Hi. Thanks for the opportunity, and congrats on a great set of numbers. First question is the move towards your inventory model. You guys said in the shareholder letter, half of the 1 percentage point accretion has already happened. Should we expect the remaining half point to come in the next three to six months? And when you think about it, could the benefit be more than 1 percentage point out here?
Akshant Goyal
Yeah, Sachin. So yeah, I think we should — I think the full benefit should accrue more like in six to nine months. And yeah, we don’t think the benefit will be more than 1% that we mentioned.
Sachin Salgaonkar
Got it. Second question is, any broad sense in terms of the store additions, what are happening in Tier 2, Tier 3 city? Is the economics similar in top tier cities in terms of AOVs, OPDs and hence, should margins be similar out here?
Albinder Singh Dhindsa
Sachin, we’re not providing any sort of breakup onto where we are opening stores but the contribution — at the contribution level, the economics for us are fairly similar even though the headline numbers might be different, depending on Tier 1 or Tier 2.
Sachin Salgaonkar
Got it. And Albi, my question was more on the long-term steady-state margin. So this should also be 5% to 6% of NOV, right, in Tier 2, Tier 3 cities?
Albinder Singh Dhindsa
Correct.
Sachin Salgaonkar
Got it. And every quarter, you guys surprise us positively in terms of looking to add more stores. When we take a four-year, five-year view, how big could this entire quick commerce dark stores be for the industry? Is there room for continued growth? Will the industry number be as high as around 10,000? Would love to get your big picture thoughts on this one.
Albinder Singh Dhindsa
Sachin, we are also finding out the depth of the market as we go along and we open more use cases. Customers also indicate how they want to use the platforms. So right now, we have a lot of vectors of growth, whether it is geographic or assortment penetration, customer use cases which are also coming up. So we are also finding out as we go along. So whenever we know better, we will sort of keep guiding to what we think. Right now, we think that, in a rational market, there should be headroom for us to add a significantly higher number of stores in the near future.
Sachin Salgaonkar
Got it. And from a mix perspective, right now where things stand, is it 70-30 mix where 70% of stores are still in top tier cities and 30% in Tier 2, Tier 3, or could that ratio change?
Albinder Singh Dhindsa
I don’t think we’re providing this breakup, Sachin.
Sachin Salgaonkar
Got it. And my last question is generally trying to understand in, for example, a place like Bangalore where every platform focusing on quick commerce is aggressive which perhaps not be the case right now on a pan India basis, how are directional trends for market share and contribution margin for you guys? Are you maintaining that share? Are you increasing share, or is there a bit of an impact out there? Just broad — directionally.
Albinder Singh Dhindsa
So I think from what the information we have, in most of the Tier 1 markets which are the metros, we have largely maintained our share of NOV, and we know that now there is competition in almost all of the cities. So that is the best information we have.
Sachin Salgaonkar
Got it. All the best for future. Thank you.
Albinder Singh Dhindsa
Thank you.
Operator
Thank you. Next question is from the line of Jignanshu Gor from Bernstein. Please go ahead.
Jignanshu Gor
Hi. Congratulations to Albinder again on the position. I had one question on just understanding the growth that we have seen in MTUs, especially on a dark store per-store basis. Right? Our ad spends haven’t — for QC, when I look at the gross versus — consol versus standalone numbers, we don’t really have — seem to have spent a lot more on ad despite the competition. So we seem to be getting a lot more organic users. What do you think is attributable to this on a per-store basis continuing to get more users and not just AOVs?
Albinder Singh Dhindsa
Jignanshu, it’s more related to assortment expansion.
Jignanshu Gor
But then, that should ideally then translate into — and that’s the second question, into higher frequency of orders per customer. Right? But that seems to have gone down. So is there a replacement happening? So that’s the circle I wasn’t able to square. Frankly.
Albinder Singh Dhindsa
No. I think that’s not as linear a relationship as you think. If customers are coming to us through categories which are expansion categories, then the frequency doesn’t necessarily go up because frequency driver categories are not the ones that they might be entering through.
Jignanshu Gor
Okay. So they are coming for expansion but not necessarily doing the core transactions yet on this platform.
Albinder Singh Dhindsa
Yeah. So the trajectory might be different for — as we start — as we expand assortment more.
Jignanshu Gor
Understood. Great. Okay. And this is a second follow-up on one of the questions. So I think Garima asked regarding leadership. So is the — does the Blinkit plus food and other going out, or the entire leadership below the three of you remains as it is and there is no change? Is that the right way to think about it, at least for now?
Albinder Singh Dhindsa
Right.
Jignanshu Gor
Okay, great. All right. Yeah, that’s it for me. Thank you and congratulations.
Operator
Thank you. Next question is from the line of Abhisek Banerjee from ICICI Securities. Please go ahead.
Abhisek Banerjee
Hey. Hi. Congratulations on a great set of numbers. Just a couple of questions from my side. So in the letter, you mentioned that capex per store will increase henceforth. Why is that? Are we also moving to a megapod structure?
Albinder Singh Dhindsa
Abhisek, it tends to be chunky and we make a lot of investment in the warehousing infrastructure as well, especially as we expand deeper and deeper into the country. So that would explain the increase in capex per store. Also we are investing a lot more in automation now.
Akshant Goyal
And also there is some increase in per-store square foot size, as you mentioned, but it may not be similar to what other competitors are doing. But in general, our store size is going up every quarter.
Abhisek Banerjee
So is that for more assortment or for any other reason?
Akshant Goyal
Yes, I mean, for us, the — I mean there’s a — it’s a function of availability of real estate, it’s a function of how we want the store design to be. And because of that, I think there’s a trend which is taking the store size up. So capex per square feet of space addition is not going to go up as much as capex per store would.
Abhisek Banerjee
Understood. Now, for Bistro, you have mentioned that you are seeing some early signs of a product market fit. Can you please elaborate on that? And do — I mean what kind of scale-up can we realistically think?
Akshant Goyal
Yeah. So Abhisek, I think product market fit for us, when we say that, we mean that, one, I think on customer side, there is genuine value being created for which they come back to the platform and transact. And then equally, from an economic standpoint, we start feeling and getting more comfort on this business being able to make money, especially given the AOVs are much lower here than what we see in the food delivery business. Right? So these are the two elements of product market fit.
The one on the demand side, I think we were anyways fairly confident. We knew that a few months ago when we opened the first few stores that customers are not coming here just for cheap food. But we are solving a sort of unmet customer demand here of quick snacky food, which is higher quality at the right price point. So I think, on that, we had conviction early, but I think as we continue to build the business, we are building more conviction on economics as well. And hence, at this point, our plan is to continue investing in this business in a sort of cautious way. And at some point, like Blinkit, if it becomes extremely clear that this is a profit-making business and margin visibility is high, then we may accelerate that expansion as well. Right? So we’ll keep all of you posted on this every quarter.
Abhisek Banerjee
So for you, this is convenience plus value, both. Well, I mean just trying to compare with Toing that Swiggy has come up with.
Akshant Goyal
Not just convenience and value, I think it’s also assortment menu. Right? So I think it’s — there’s a cuisine gap in the market which I think Bistro fills. And that is also why we don’t see this business cannibalizing the Zomato business, right, wherever the we have these stores.
Abhisek Banerjee
Understood. And one last question from my side is, in Deepinder’s letter, it’s mentioned that his unvested shares would come back to the employee pool. Now what kind of an expansion would the ESOP pool then have? And how do you kind of think you are set for, and for how much of a time period do you think you do not need to do more grants?
Akshant Goyal
No. So I think, see, the way it works is we have a ESOP pool which has a large number of shares today. I think roughly about — I’ll need to check the number, but I think it’s north of 20 crore shares. So his ESOPs will perhaps expand that pool by another 3.3 crore shares. Right? And the grant from this pool is a function of the board allocating ESOPs to different employees, basis their performance, etc. Right? So grant is therefore — the grants are not going to go up just because the pool size went up, but because the pool size went up, we may not need to dilute our ESOPs again for slightly longer than what we would have otherwise done. I think that’s what we’re trying to say here.
Abhisek Banerjee
Understood. And any visibility on how much of a runway you have with current ESOP pool?
Akshant Goyal
Hard to say. I think at least we don’t think we need any dilution in the near future at this point.
Abhisek Banerjee
Okay, thank you. That will be all from my side.
Operator
Thank you. Next question is from the line of Kunal Vora from BNP Paribas. Please go ahead.
Kunal Vora
Hello. Yeah, thanks. You mentioned that this quarter you had 211 net store addition. Did you close any stores during the quarter?
Albinder Singh Dhindsa
Yeah, Kunal, just regular closures that happen for different reasons. So that is ex net store addition.
Kunal Vora
Okay, so how higher will the gross number be versus the net number because that could also explain the capex?
Albinder Singh Dhindsa
Closure rate is very low.
Kunal Vora
Very low. Okay, okay, okay. And there has been rapid expansion over the last few quarters. Do you see a need to review some of the stores? And similarly, there are cities which — smaller cities, do you think some of them you might need to exit or it all looks good?
Albinder Singh Dhindsa
It looks good.
Kunal Vora
Okay. Second is in terms of competition, is it largely between the three quick commerce players or is it the e-com players which have also expanded? Physical retailers such as JioMart also are talking about almost 800 dark stores and 1.6 million daily orders. So are you seeing any impact of these players at least in the Tier 2, Tier 3 cities?
Albinder Singh Dhindsa
See, I think, for us, competition is everybody who’s trying to gain a market share of the online buying pie. So I think everybody’s included.
Kunal Vora
But is there an increase in competition with the other three players also now getting more aggressive?
Albinder Singh Dhindsa
Yeah, I think generally, the competition across the board has gone up.
Kunal Vora
Okay, fine. Lastly, in Blinkit, how much do cities beyond the top eight cities contribute and how is the experience beyond the top cities? How many cities do you see a potential in?
Albinder Singh Dhindsa
We are not disclosing that, Kunal. I’ve mentioned that before also on the call.
Kunal Vora
Okay, okay, okay. That’s it for me. Thank you.
Albinder Singh Dhindsa
Thank you.
Operator
Thank you. Next question is from the line of Nikhil Choudhary from Nuvama. Please go ahead.
Nikhil Choudhary
Yeah, thanks for the opportunity, and congratulations on achieving breakeven in Blinkit and Hyperpure. So first question is on 100% growth part. Last quarter, you have mentioned that you can deliver 100% Y-o-Y growth for next two years. And if the opportunity size is so large, which we believe ideally it should be, then why short-term change in competitive intensity can derail it? Especially when you guys have already achieved breakeven, you are talking about investing on market share gain, then what is stopping us from achieving this 100% growth? What has changed basically in one quarter?
Albinder Singh Dhindsa
Nikhil, our viewpoint on this is that there is — the competitive intensity is also depending on the kind of competition you see. Currently, we feel that we are the only ones who are meaningfully contributing to increasing the market size, whereas the competitive intensity is mostly showing up in taking share away. And that is why you will see that pressure on growth. Usually, you will see much faster market growth, and then all the players are also gaining share, but we are not seeing that kind of competition.
Nikhil Choudhary
Got it. Thank you. Second, is the behavior remain consistent across the player, or is it more limited to incumbent? So what I meant to say is, is new players like Amazon, Flipkart and JioMart is also resorting to this kind of competition now, or is it more limited to incumbents?
Akshant Goyal
Nikhil, we wouldn’t want to comment on this question. I think you should find out and talk to others.
Nikhil Choudhary
Got it. The last one on food delivery. We saw some acceleration this time, and also we are hearing positive commentary from consumer and consumption-driven companies in India. Is it fair to say you are more comfortable in reaching, let’s say, 20% growth in FY ’27, or maybe in two to three quarters?
Akshant Goyal
So very hard to say, Nikhil. I think these things keep changing for reasons which are beyond our control. So I think we don’t want to venture and take a guess here on how this moves. I think our business responds to growth and demand and it’s an asset-light model. So if the demand expands, we don’t — unlike Blinkit, we don’t need to build infrastructure to service it. Right?
So whatever is the pace of growth of consumer demand in the country, I think we — the business, our job is to make sure that we are able to cater to it and that largely our job there is to make sure that delivery partner supply matches the growth in demand and restaurants are able to respond to that in terms of capacity. Right? So yeah, I think we’ll just stick to our job and we don’t want to take a guess on how this will grow from here in terms of growth rates.
Nikhil Choudhary
Got it. Just last one on the leadership transition. I think while you have clarified that currently everyone is doing what they were doing, but is it fair to say medium to long term, ultimately, the goal is to transition more responsibility to Albinder and Deepinder maybe taking more executive role?
Akshant Goyal
That’s not the plan, Nikhil. I think Deepinder is — as his letter mentions, he’s going to continue to be involved in the way he was in the past, and I think there’s a lot to be built at Eternal right now. Most of our businesses are young, including food delivery. So I think we have a long runway ahead and, at this point, we’re all committed to continue building it.
Nikhil Choudhary
Got it. Very helpful. Thanks a lot, and good luck for coming period. Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, we will now take the last one to two questions. The next question is from the line of Vijit Jain from Citigroup. Please go ahead.
Vijit Jain
Yeah, hi. Thanks for the opportunity, and congratulations, Albinder, on the elevation to the CEO role, and to the team for the breakeven. My first question, so you said earlier that store sizes in general continue to go up every quarter. I’m wondering, as you densify in mature cities, are store sizes going up there as well? And related question to that. When you say automation in stores, could you talk a little bit about which — where the automation will come in the stores? That’s my first question.
Albinder Singh Dhindsa
Vijit, on the first one, yes, the store size is going up in — across the board. And on automation, actually most of our automation is more related to our overall supply chain. So it’s not just the stores.
Vijit Jain
Okay, got it. The second question I had was — you mentioned earlier — you talked about assortment changes as business grows and matures. In terms of the metrics that you track, is gross profits per square feet per day — I know you mentioned these metrics in the past, is still the North Star? And do you care about maximizing order throughput per dark store per day at all? I’m just trying to get a sense on this because there are certain conversations that tend to focus too much on orders per dark store per day.
Albinder Singh Dhindsa
Vijit, we don’t really have those kind of targets, whether it is orders per day or sales per square foot. I think our plan is to provide customers a better experience, whatever allows us to do it and is good for the overall economics of the business. That’s the direction that we end up going in.
Vijit Jain
Got it. Thank you so much. Those were my questions.
Albinder Singh Dhindsa
Thank you, Vijit.
Operator
[Operator Closing Remarks]