Source: The Economic Times
Mumbai: Shares of Eternal, the parent of Zomato and Blinkit, rose 7.55% to ₹276.80 at BSE on Monday after the company reported strong revenue growth in Q1 FY26, despite its net profit declining 90% from the same quarter last year.
Sales Jump, Profit Fall.
Eternal registered an increased revenue of 70% year-on-year (YoY) to ₹7,167 crore in Q1FY26 compared to ₹4,206 crore in Q1FY25. In contrast, the company’s net profit experienced a huge decline to ₹25 crore, from ₹253 crore in the same quarter of last year.
The profit also decreased 36% compared to the last quarter (Q4FY25), when Eternal posted profit of ₹39 crore.
Blinkit Exhibits Exceptional Growth
Blinkit, Eternal’s quick commerce business, primarily fueled the rapid increase in revenue. Blinkit achieved ₹2,400 crore of revenue compared to ₹942 crore in the same quarter previous year, and ₹1,709 crore revenue in previous quarter.
Eternal’s food delivery business (expedited by Zomato) had a solid quarter as well with a revenue of ₹2,261 crore, compared to ₹1,924 crore in Q1FY25.
This surge in revenue indicates that Blinkit is becoming increasingly popular and a considerable portion of Eternal’s complete operations.
Profits Affected by Expenses
“On the profitability front, consolidated Adjusted EBITDA declined 42% YoY to Rs 172 crore in Q1FY26, largely on account of the continuing investments in quick commerce and going-out, which were partly offset by the improvement in food delivery Adjusted EBITDA margin (as a % of NOV) to 5.0% from 3.9% a year ago,” the company informed in its filing to the exchanges.
Investor Confidence Remains Strong
Only Eternal’s profit decreased, but investors were not much concerned with that. The new growth phase at Eternal and good showing by Blinkit seemed to give investors reassurance with the company’s future. The stock closed 5.6% higher, at its highest levels in five months.
What’s Ahead
Eternal is spending more money to grow the business, especially Blinkit. Of course, this is currently harming profits, but the company is hoping for a better return in the long term.
If Blinkit continues its growth and profit margins improve, Eternal could return to better results in the next few quarters.
Conclusion: The surge in Eternal’s revenue growth and Blinkit’s performance has instilled investor confidence, even in the context of a sudden decline in profit. Continuing with expansion as a primary driver, the company expects to yield long-term benefits for shareholders.
Disclaimer: This article is for informational use only. We encourage you to seek the advice of a financial professional before making any investments
