Eternal Shares Jumps 15% as Blinkit Outpaces Food Delivery, Eyes Inventory Model

On Tuesday, Eternal Limited shares jumped 14.55 percent, touching a day’s high price of Rs 311.25 on NSE after it disclosed a financial performance for Q1FY26, marked by a dramatic surge in revenue but a steep decline in profits. As the parent of brands like Zomato and Blinkit, the company closed the quarter with consolidated net profit declining 90 percent year-on-year to Rs 25 crore, compared to Rs 253 crore in Q1FY25. This sharp dip reflects aggressive investments in new business verticals, especially in the quick commerce space. Despite the profit contraction, revenue from operations soared by 70.4 percent to Rs 7,167 crore, up from Rs 4,206 crore a year earlier. On a sequential basis, revenue increased by nearly 23 percent, highlighting operational momentum in a challenging environment.

The company’s quarterly performance was driven primarily by the exponential growth in its quick commerce segment, Blinkit. During Q1FY26, Blinkit’s revenue recorded a 155 percent year-on-year increase, reaching Rs 2,400 crore, while its net order value (NOV) grew 127 percent YoY to Rs 9,203 crore. Notably, for the first time, Blinkit's NOV surpassed that of the traditional food delivery business, which grew 13 percent YoY to Rs 8,967 crore. This milestone underscores a significant strategic shift, positioning quick commerce as Eternal’s new growth engine.

The rapid scale-up came with its costs. Total expenses climbed 77 percent YoY to Rs 7,433 crore, due to increased outlays in delivery-related charges and marketing, as Eternal increased its investment in expanding its network of dark stores for Blinkit and broadened its footprint within the food and hospitality sectors. Adjusted consolidated EBITDA for the quarter stood at Rs 172 crore, a 42 percent drop compared to the same period last year, reflecting the margin compression resulting from these ongoing expenditures.

CEO Deepinder Goyal indicated that while YoY profit growth has been under pressure, the investments are purposeful. He expects that food delivery’s growth rate has likely bottomed and should recover gradually, targeting north of 15% NOV growth for FY26 with an eye toward 20% in FY27.

Looking forward, Eternal’s management provided an upbeat outlook, signalling that the foundation for future profitability is being laid through deepening market penetration and operational leverage. The company has set an ambitious target to expand its dark store network to 2,000 by December 2025 and step up further to 3,000 stores in subsequent quarters from the current 1,544 stores.  

Eternal CFO Akshant Goyal said, “We will be gradually transitioning our quick commerce business from a marketplace model to inventory ownership over the next 2-3 quarters. Our teams are well prepared for this transition, and we expect to start working with brands directly without any disruption to the business. Control over inventory gives us more leverage on margins in the business plus allows us to push harder and faster on assortment expansion. We expect to see about a 1 percentage point margin expansion over time as a result of this transition.“ Further, the company forecasts that if it achieves a 5 to 6 percent adjusted EBITDA margin, its RoCE will be around 40 percent.

Analyst consensus remains optimistic, with the majority maintaining ‘Buy’ ratings and several upward price target revisions, with Jefferies providing Rs 400, Bernstein having an ‘Outperform’ tag of Rs 320, CLSA with a ‘High Conviction Outperform’ of Rs 385, and others reflecting confidence in Eternal’s diversified growth strategy and the long-term prospects of its quick commerce and food delivery engines.