Eternal Limited (ETERNAL.NS) Q3 FY2026 Earnings Call Transcript & Summary

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 Dhindsa and Kunal Swarup. Before we begin, a few quick announcement for the attendees. Anything said on this call, which reflects 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]

First question is from the line of Manish Adukia from Goldman Sachs.

Congratulations on a good quarter. So my first question is on the quick commerce margins or losses and congratulations on breakeven there. Now in this quarter, if you look at 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're 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.

Manish, Akshant here. So I think, yes, I mean, like it's very hard to predict the trajectory of margin, I think which is what we also mentioned in 1 of the questions 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 actually -- on our last conference call, we mentioned that the competitive intensity is now easing off and then changed. So I think the margins is a function of various things. Competitive intensity is 1 of it. And even that within a quarter or even in a longer period, the various variables is 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 of competitive intensity was higher in the last quarter, and therefore, going forward, it should also be the same. So it's, I think, a multivariable problem with not a linear correlation with just 1 variable.

No, appreciate that, Akshant. So a 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 in previous quarter, you mentioned that you want to grow at 100% Y-o-Y or expect 200% Y-O-Y, at least for the next 1 to 2 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 is 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.

Yes, broadly, that's right.

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 ramped up because a lot of competitors went to 0 like low MOVs and 0 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.

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 -- driver of that is assortment expansion, which is not as fast moving as some of the main head SKUs. So I think over the 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.

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?

No. So we are not saying that, Manish. I think -- I mean, there's always a way to look at things, and 1 can argue that in absence of a national competition that we are pointing out, things would have been much better than what they are today, right? So that's also 1 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, right? So for example, in the last quarter, we didn't see these previous 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.

Just last question before I jump back in the queue. You've maintained your INR 3 billion NOV guidance for going out in F '30, which would imply north of 30% CAGR over the next 4 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 in your guidance?

Yes. So I think a large part of our growth here in this business is we are expecting going forward is 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 there even now compared to our competitors, right? So for us to deliver 30% CAGR over the next 3, 4 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.

Next question is from the line of Ankur Rudra from JPMorgan.

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, you lose some share to peers?

Yes, some of it is an impact of that, Ankur.

Got it. And in going forward, do you think this will normalize?

We have no idea. It depends on how the overall market behaves.

Got it. Maybe just another follow-up on the previous question. Your addition has slowed down this time, which should imply a better store vintage and the older stores 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 is not expanding if you see a better vintage?

Yes. So Ankur, that's again a function, as I mentioned that if you -- if a lot of our store addition last -- not just last quarter, but last 2, 3 quarters has been towards assortment expansion. And as we know from 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. You should bounce back and NOV per store, which we believe will continue to grow.

Also part of the impact was on account of the GST chain. I think that -- in absence of that, that 3% impact would have been here.

Yes, I saw that. I was hoping it will expand given the slowdown a bit. But I understand your 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 working capital days seem to be expanding. If you can comment on those 2 factors, please?

Yes. So Ankur, as you had 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, et cetera. So we have been 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.

Next question is from the line of Swapnil Potdukhe from JM Financial.

Congrats on now breaking even in the quick commerce business. My first question is with respect to 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?

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.

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 1 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 we -- that's resulting in the increase in margins.

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?

So yes, for next quarter or even 2, we don't want to comment anything, Swapnil, and I think I hope you'll appreciate that. And we've mentioned that in the letter, try to explain what are the various reasons why this might be a 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.

Okay. And could you just...

I mean, just to add, I think longer term, in our letter, we mentioned that our confidence on margins going to be 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 would 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 3, 6 months, and that's why the unpredictability on margin from here on.

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 2 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?

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 a next quarter will reflect that, but I don't expect that to be meaningful at all.

Got it. And just the last 1 on the going out side. I mean our previous thought process was that the losses in that business will be around INR 60 crore, INR 70 crores maybe, quarterly wise. There has been a certain 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 have 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 [ too ], sir?

Yes. 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 4 to 6 quarters.

Next question is from the line of Garima Mishra from Kotak Equities.

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?

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.

All right. 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?

No. Garima, as we mentioned in the letter, we continue to operate like they're operating. I think still as a team of Akshant, DP and I will continue to do whatever we were doing, including me, leading the Blinkit business. So operationally, nothing changes for us.

Next question is from the land of Gaurav Rateria from Morgan Stanley.

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?

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.

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 intervention 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?

Gaurav, I think competitive intensity also tends to go up over time because the kind of competitive interventions that we are seeing, the -- they are 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 an intervention, and I hope that the competition also stays at the same thing. I think people will change. They will be more competitive and still we'll have to also respond to that.

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?

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.

I think his question is that what does that mean for free cash flow margins, right? Free cash flow over revenue?

Yes.

Gaurav, we haven't looked at that yet, honestly. So [indiscernible].

Next question is from the line of Gaurav Malhotra from Axis Securities.

Congrats on good set of numbers. Just a couple of questions. In the shareholder mentioned that 90% you guys have shifted to inventory. So the remaining 10%, which you said you will not ship. What is the assortment there? Is it like electronics, slower moving goods, higher ASP items, what is the assortment of that 10%?

Gaurav, some of that is SKUs that we do want to keep on a marketplace model for different reasons, some of which are also rated to there 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 back end, and we would be able to do that. So that's probably the kind of SKUs that contribute to that number.

Got it. And just on food delivery, you did take down the delivery charges. And we are seeing some -- we are seeing 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?

Gaurav, so on the growth, again, we mentioned, I think in response to question 7, 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, it was on food, right?

Yes, it was on food. It was on food.

Yes. 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.

Next question is from the line of Sachin Salgaonkar from Bank of America.

Congrats on a great set of numbers. First question is the move towards your inventory model. You guys said in the shareholder that half of the 1 percentage point accretion has already happened. Should we expect the remaining half point to come in the next 3 to 6 months? And when you think about it, could the benefit be more than 1 percentage point out here?

Yes, Sachin. So yes, I think we should -- I think a full benefit should accrue more like in 6 to 9 months. And yes, we don't think the benefit will be more than 1% that we mentioned.

Got it. Second question is any broad sense in terms of the store additions that 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?

Sachin, we are not providing any sort of breakup on to 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.

Got it. And Albin my question was more on the long-term steady state margins. So this should also be 5% to 6% of NOV, right, in Tier 2, Tier 3 cities?

Correct.

Got it. And every quarter, you guys surprises positively in terms of looking to add more stores. When we take a 4-year, 5-year view, how big could this entire quick commerce DAC stores be for the industry, i.e. is there room for continued growth? Will the industry number be as has around 10,000? Would love to get your big picture thoughts on this one.

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's 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.

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?

I don't think we're providing this split up, Sachin.

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.

So I think from what the information we have in most of the Tier 1 markets, which is the metros, we have largely maintained our shares of NAV. And we know that there is -- now there is competition in almost all of the cities. So that is the best information we have.

Next question is from the line of Jignanshu Gor from Bernstein.

Congratulations to Albinder again on the position. I had 1 question on just understanding the growth that you have seen in MDUs, especially on a DAC store per store basis, right? Our ad spends haven't -- for QC, when I look at the gross versus console versus stand-alone 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 AOEs.

Jignanshu, it's more related to assortment expansion.

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.

No, I think that's not as linear relationship as you think. If customers are coming to us through categories which are expansion categories, then the frequency not -- doesn't necessarily go up because frequency driver categories are not the ones that we might be entering to.

Okay. So they are coming for expansion, but not necessarily doing the core transactions yet on this platform?

Yes. So the trajectory might be different for as we expand assortment more.

Understood. Great. Okay. And just a second follow-up on 1 of the questions, I think Garima asked regarding leadership. So is the -- does the Blinkit plus food and other going out or the entire leadership below the 3 of you remains as it is, and there is no change? Is that the right way to think about it, at least for now?

That's right.

Next question is from Abhisek Banerjee from ICICI Securities.

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,so why is that? Are you also moving to a mega part of the structure?

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.

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.

So is that for more assortment or any other reason?

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 the CapEx per store would.

Now for Bistro, you mentioned that you're seeing some early signs of the product market fit. Can you be please elaborate on that? And do you -- I mean, when can we scale up [indiscernible] you think?

Yes. So Abhisek, I think product market fit for us when we say that, we mean that, one, I think on the 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 2 elements of product market fit. The 1 on the demand side, I think we were anyway 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 an unmet customer demand here of quick snacky food, which is higher quality at the 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 we get extremely -- if it becomes extremely clear that this is a profit-making business and margin visibility is higher, then we may accelerate that expansion as well, right? So we keep all of you posted on this every quarter.

So for you, this is convenience plus value, both. I mean just trying to compare with growing that CVS amount.

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 we have these stores.

And one last question from my side is in the business letter mentioned that shares would come back to the employee pool. Now what kind of an expansion would the ESOP pool that have? And how do you kind of think which was set for and for how much of a time period do you think you do not need to do more grants?

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 need to check the number, but I think it's north of 20 crore shares. So these ESOPs will perhaps expand that pool by another 3.3 crore shares, right? And the brand from this pool is a function of the board allocating ESOPs to different employees basis, their performance, et cetera, 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 ESOP again or slightly longer than what we would have otherwise done. I think that's what we're trying to say here.

Understood. And any visibility on how much of a runway you have with current ESOP pool?

Hard to say, I think at least we don't think we need any dilution in the near future at this point.

Next question is from the line of Kunal Vora from BNP Paribas.

You mentioned that this quarter, you had 211 net store additions. Did you close any stores during the quarter?

Yes, Kunal, just regular closures that happen for different reasons. So that is it's a net store addition.

Okay. So how higher will the gross number be versus the debt number because that would also explain the CapEx.

Closure rate is very low.

Very low. 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 -- like I mean smaller cities, do you think some of them you might need to exit or it all looks good?

It looks good.

Okay. Second is in terms of competition, is it largely between the 3 quick commerce players? Or is it the e-com player, which have also expanded physical retailers such as JioMart are talking about almost 800 DAC stores and 1.6 million daily order. So are you seeing any impact of like these players, at least in the Tier 2, Tier 3 cities?

See, I think for us, competition is everybody who's trying to gain a market share of the ECA online buying pie. So I think everybody is included.

But is there an increase in competition with the other 3 players also now getting more aggressive?

Yes. I think generally, the competition across the board has gone up.

Okay. Right. Lastly, in Blinkit, how much do cities beyond the top 8 cities contribute? And how is the experience beyond the top cities? How many cities to see a potential in?

We are not disclosing that, Kunal, I've mentioned that before also on the call.

Next question is from the line of Nikhil Choudhary from Nuvama.

Yes. 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 over the next 2 years. And if the opportunity size is so large, which we believe highly should be, then why short-term change in competitive intensity can relate 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 1 quarter?

Nikhil, our viewpoint on this is that there is -- the competitive intensities 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 and 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.

Got it. Second is the behavior remain consistent across the player? Or is it more limited to implement? So what I meant to say is, is new players like Amazon or Flipkart and JioMart is also resulting to this kind of competition now? Or is it more limited to incumbent?

We wouldn't want to comment on this question. I think you should find out and talk to others.

Got it. The last 1 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 2 to 3 quarters?

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 response to growth in demand and it's an asset-light model. So if the demand expands, we don't like blink it. 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 -- in 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 I think we 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.

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?

That's not the plan, Nikhil. I think Deepinder, as his letter mentioned, 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 are all committed to continue building it.

Ladies and gentlemen, in the interest of time, we will now take the last 1 to 2 questions. The next question is from the line of Vijit Jain from Citigroup.

Congratulations Albinder, on the revision 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.

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.

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 profit per square feet per day, I know you mentioned 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?

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.

Thank you. We will now conclude this conference call. Thank you for joining us, and you may now disconnect your lines.