Zomato, now operating under its parent company Eternal Ltd., has unveiled its Q1 FY26 financial results, showcasing a remarkable 70.4% year-on-year (YoY) revenue surge to ₹7,167 crore. This robust growth, announced on July 21, 2025, highlights the company’s strategic pivot toward quick commerce and diversified offerings. However, a sharp 90% YoY decline in net profit to ₹25 crore has sparked discussions among investors and analysts. Despite the profit dip, Eternal’s stock rallied over 7%, driven by optimism around its quick commerce arm, Blinkit, which surpassed Zomato’s core food delivery business in net order value (NOV) for the first time. This article dives deep into Eternal’s Q1 FY26 performance, exploring key financial metrics, market reactions, and future growth prospects.
Eternal Ltd.: A New Era for Zomato and Blinkit
Eternal Ltd., formerly Zomato, has rebranded to reflect its evolution into a diversified technology conglomerate. The company now encompasses Zomato (food delivery), Blinkit (quick commerce), Hyperpure (B2B supplies), and District (going-out services). This strategic shift, approved by the board in March 2025, aims to streamline operations and position Eternal as a leader in multiple high-growth sectors. The Q1 FY26 results underscore the success of this transformation, with Blinkit emerging as a powerhouse and driving significant revenue growth.
Key Financial Highlights of Q1 FY26
Eternal’s Q1 FY26 financials reveal a dynamic performance, with significant gains in revenue overshadowed by challenges in profitability. Below is a breakdown of the key metrics:
- Revenue Growth: Eternal reported a consolidated revenue of ₹7,167 crore, a 70.4% YoY increase from ₹4,206 crore in Q1 FY25. Sequentially, revenue grew 22.86% from ₹5,833 crore in Q4 FY25. This growth reflects strong contributions from Blinkit and Hyperpure, alongside steady performance in food delivery.
- Profit Decline: Consolidated net profit plummeted 90% YoY to ₹25 crore from ₹253 crore in Q1 FY25. On a quarter-on-quarter (QoQ) basis, profit fell 36% from ₹39 crore in Q4 FY25. The decline is attributed to increased expenses in Blinkit and the going-out business (District).
- Expenses Surge: Total expenses rose to ₹7,433 crore in Q1 FY26, up 67.9% YoY from ₹4,203 crore in Q1 FY25. Other income expenses doubled to ₹1,400 crore from ₹677 crore, primarily due to investments in Blinkit’s infrastructure and operations.
- EBITDA Performance: Adjusted EBITDA dropped 42% YoY to ₹172 crore, driven by ongoing investments in quick commerce. However, the food delivery segment improved its adjusted EBITDA margin to 5.0% from 3.9% YoY, signaling operational efficiency in the core business.
- Earnings Per Share (EPS): EPS fell to ₹0.03 in Q1 FY26 from ₹0.29 in Q1 FY25, reflecting the profit decline. This has raised concerns about valuation, with some analysts noting the stock’s high price-to-earnings ratio of 649.51.
These figures highlight Eternal’s aggressive growth strategy, with significant investments in quick commerce offsetting profitability in the short term. The market’s positive response, with shares climbing to ₹275, suggests confidence in the company’s long-term potential.
Blinkit’s Meteoric Rise: A Game-Changer for Eternal
Blinkit, Eternal’s quick commerce arm, has emerged as the star performer in Q1 FY26, surpassing Zomato’s food delivery business in net order value (NOV). This milestone marks a significant shift in Eternal’s business model, with quick commerce becoming the leading B2C segment.
Blinkit’s Revenue and Growth Metrics
- Revenue Surge: Blinkit’s revenue soared 154.7% YoY to ₹2,400 crore in Q1 FY26 from ₹942 crore in Q1 FY25. This growth outpaced Zomato’s food delivery revenue, which rose 17.7% YoY to ₹2,657 crore.
- Net Order Value (NOV): Blinkit’s NOV surpassed Zomato’s for the first time, contributing nearly half of Eternal’s annualized B2C NOV of $10 billion. The quick commerce segment recorded a 133.1% YoY GOV growth, driven by a 16% QoQ increase in order volumes and a rise in monthly transacting users (MTUs) to 16 million from 13.7 million.
- Store Expansion: Blinkit added 243 new dark stores, bringing the total to 1,544 by the end of Q1 FY26. This expansion supports faster delivery and broader product offerings, enhancing customer satisfaction.
CEO Deepinder Goyal’s vision for Blinkit as a larger growth driver than food delivery is materializing. The company’s focus on quick commerce aligns with evolving consumer preferences for rapid delivery of groceries and essentials, positioning Blinkit as a leader in India’s competitive e-commerce landscape.
Strategic Shift to Inventory Ownership
Eternal announced a pivotal shift in Blinkit’s operations, moving from a marketplace model to an inventory ownership model over the next two to three quarters. This transition aims to enhance operational control and efficiency, enabling Blinkit to work directly with brands. The move is expected to streamline supply chains and improve margins, although it may increase capital expenditure in the near term.
Zomato’s Food Delivery: Steady Growth Amid Challenges
While Blinkit stole the spotlight, Zomato’s food delivery business delivered steady performance, with notable improvements in user engagement and operational efficiency.
Food Delivery Performance Metrics
- Revenue Growth: Food delivery revenue increased 17.7% YoY to ₹2,657 crore from ₹2,256 crore in Q1 FY25. Sequentially, revenue grew 10% from ₹2,409 crore in Q4 FY25.
- Gross Order Value (GOV): GOV rose 13% YoY and 9% QoQ to ₹10,769 crore, driven by a 12.8% YoY increase in monthly transacting customers (MTCs) to 22.9 million.
- EBITDA Margin Improvement: The adjusted EBITDA margin for food delivery improved to 5.0% from 3.9% YoY, reflecting better unit economics despite seasonal challenges like festivals and adverse weather.
Despite these gains, CEO Deepinder Goyal noted that food delivery margins face seasonal pressures in Q1 due to reduced delivery partner availability and weather-related disruptions. However, the segment’s steady growth and improved margins underscore its role as a stable revenue driver.
Hyperpure and District: Emerging Growth Engines
Eternal’s B2B and going-out segments also contributed to the company’s growth, with Hyperpure and District showing promising results.
Hyperpure’s Robust Growth
Hyperpure, Eternal’s B2B supply chain solution for restaurants, reported an 89.36% YoY junior revenue increase to ₹2,295 crore in Q1 FY26 from ₹1,212 crore in Q1 FY25. This growth reflects strong demand for farm-to-fork supplies, although the company anticipates a decline in non-restaurant B2B sales as these buyers shift to Blinkit’s platform.
District’s High-Value Orders
The District app, which facilitates bookings for movies, live events, and restaurant reservations, generated an annualized NOV of ₹8,000 crore in Q1 FY26, growing 30% YoY. With an average order value (AOV) of ₹1,700, District’s revenue per order surpasses both Zomato and Blinkit. CFO Akshant Goyal projects that District could scale to a $3 billion annualized topline with $150 million in adjusted EBITDA within five years.
Market Reaction: Stock Surges Despite Profit Dip
Eternal’s shares surged over 7% to ₹275 following the Q1 FY26 results, reflecting investor optimism about the company’s growth trajectory. Analysts attribute the rally to Blinkit’s outperformance and positive management commentary, despite the sharp profit decline.
Analyst Insights and Price Targets
- Rajesh Bhosale, Angel One: Noted strong volume-driven traction in Eternal’s stock, predicting continued momentum with resistance at ₹285 and support at ₹260. A buy-on-dips strategy is recommended.
- Foreign Brokerage: Reaffirmed an Overweight rating with a target price of ₹320, citing Eternal’s dominance in food delivery and quick commerce, lean cost structure, and solid balance sheet.
- ICICI Securities: Estimated food delivery GOV growth of 17% YoY and Blinkit GOV growth of 140.3% YoY, with adjusted revenue projected at ₹7,081.2 crore.
- Kotak Institutional Equities: Forecasted 59% YoY revenue growth, driven by Blinkit’s 113% YoY revenue increase and Hyperpure’s 75% YoY growth.
The stock’s breakout from a trading range of ₹235–265, coupled with high trading volumes, signals strong market confidence. Analysts project a potential move to ₹300 in the near term, driven by Blinkit’s growth and strategic expansions.
Challenges and Risks
Despite the positive market response, Eternal faces several challenges that could impact its profitability and growth:
- Rising Expenses: The 67.9% YoY increase in expenses to ₹7,433 crore, particularly in Blinkit, highlights the need for better cost control. Investments in dark stores and inventory ownership may strain margins in the near term.
- Profit Volatility: The 90% YoY profit decline raises concerns about the sustainability of Eternal’s aggressive growth strategy. Seasonal factors and competitive pressures in quick commerce could further impact profitability.
- Competition in Quick Commerce: Rising competition from players like Swiggy and potential new entrants like Rapido could lead to aggressive discounting, threatening margins. Jefferies flagged 2025 as a consolidation year for quick commerce.
- Valuation Concerns: With an EPS of ₹0.03 and a P/E ratio of 649.51, Eternal’s stock appears expensive, prompting caution among some investors.
Deepinder Goyal addressed competitive concerns, stating that no significant innovations currently threaten Eternal’s core businesses. However, the company must navigate operational hurdles, such as rising last-mile delivery costs and delivery partner shortages, to sustain its growth momentum.
Strategic Initiatives and Future Outlook
Eternal’s Q1 FY26 results highlight its commitment to long-term growth over short-term profitability. Key strategic initiatives include:
- Blinkit Foods Subsidiary: The board approved the incorporation of Blinkit Foods, a wholly-owned subsidiary with a ₹10 lakh share capital, to focus on food services, including preparation and delivery. This move aims to tap into demand for high-quality, low-cost meals and snacky food delivered in 10 minutes.
- Bistro Expansion: Eternal launched Bistro, a delivery service with 38 kitchens in Delhi-NCR and Bangalore, owned and operated by Blinkit. Early data shows incremental demand without cannibalizing Zomato’s business, targeting cost-conscious customers and snack-focused orders.
- Rotational Leadership: Eternal’s adoption of a rotational leadership model, with CEO roles for each business limited to two-year terms, ensures agility and fresh perspectives. This approach supports innovation and adaptability in a competitive market.
- Cash Balance Strength: Eternal’s cash balance grew marginally to ₹18,857 crore in Q1 FY26, nearly three times that of rival Swiggy, providing financial flexibility for expansion and innovation.
Looking ahead, Eternal projects FY26 NOV growth of 15–20%, with a potential rebound toward 20% in FY27. The company’s focus on quick commerce, inventory ownership, and high-value offerings like District positions it for sustained growth, despite near-term profitability challenges.
Why Eternal Remains a Top Investment Pick
Eternal’s Q1 FY26 results underscore its transformation into a diversified technology leader, with Blinkit’s rapid growth and Zomato’s steady performance driving investor confidence. The company’s lean cost structure, dominant market position, and robust cash reserves mitigate risks associated with high valuations and competitive pressures. For investors, Eternal offers a compelling long-term opportunity, particularly for those with a three-year investment horizon, as recommended by analysts.
Investment Considerations
- Buy-on-Dips Strategy: With support at ₹260 and resistance at ₹285, investors can consider entering on price corrections, given the stock’s breakout momentum.
- Long-Term Growth Potential: Blinkit’s outperformance and District’s high AOV signal significant upside, with analysts projecting a $3 billion topline for District by 2030.
- Risk Management: Investors should monitor expense trends and competitive dynamics, as these could impact margins. A diversified portfolio can help mitigate risks associated with Eternal’s high valuation.
Conclusion: Eternal’s Bold Bet on Quick Commerce Pays Off
Eternal Ltd.’s Q1 FY26 results mark a pivotal moment in its journey, with Blinkit’s meteoric rise and Zomato’s steady growth signaling a new era of innovation and expansion. While profitability challenges persist, the company’s 70.4% revenue surge and strategic initiatives like inventory ownership and Bistro demonstrate its commitment to capturing India’s burgeoning e-commerce and food delivery markets. With a strong cash balance, rotational leadership, and a diversified portfolio, Eternal is well-positioned to navigate competitive pressures and deliver long-term value. Investors eyeing growth in India’s tech sector should consider Eternal a top pick, with potential to reach ₹300 and beyond in the coming sessions.
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