ETERNAL: ₹271.20 +14.8%
52W High: ₹311.60
Market Cap: ₹3,00,000 Cr
Volume: 8.59M
Eternal Shares Hit All-Time High Despite 90% Profit Drop
Q1 FY26 Results Analysis: Revenue Surges 70% as Blinkit Drives Growth Story
🚀 Key Market Highlights
Share Price Performance
₹311.60
All-time high hit on July 22, 2025
Revenue Growth
+70.3%
YoY to ₹7,167 crore in Q1 FY26
Blinkit GOV
+140%
YoY growth to ₹11,821 crore
Analyst Target
₹400
Jefferies upgraded to ‘Buy’
Eternal Limited (formerly Zomato) shares created history on July 22, 2025, surging 14.8% to hit an all-time high of ₹311.60, propelling the company’s market capitalization past the ₹3 trillion mark. This remarkable rally came despite the company reporting a 90% year-on-year decline in net profit for Q1 FY26, highlighting investors’ confidence in the company’s long-term growth prospects driven by its quick commerce arm, Blinkit.
Q1 FY26 Financial Performance
| Metric | Q1 FY26 | Q1 FY25 | YoY Change | Q4 FY25 | QoQ Change |
|---|---|---|---|---|---|
| Revenue from Operations | ₹7,167 Cr | ₹4,206 Cr | +70.3% | ₹5,833 Cr | +22.9% |
| Net Profit | ₹25 Cr | ₹253 Cr | -90.1% | ₹39 Cr | -35.8% |
| Adjusted EBITDA | ₹172 Cr | ₹298 Cr | -42.3% | ₹235 Cr | -26.8% |
| B2C Net Order Value | ₹20,183 Cr | ₹13,020 Cr | +55.0% | ₹17,398 Cr | +16.0% |
Key Takeaway: While profitability faced pressure due to aggressive expansion investments, the 70% revenue growth and 55% increase in B2C Net Order Value demonstrate the company’s strong operational momentum and market share gains.
Business Segment Performance
🛒 Quick Commerce (Blinkit) – The Star Performer
Revenue: ₹2,400 Cr
+154.7% YoY
GOV: ₹11,821 Cr
+140.1% YoY
Historic Milestone: Blinkit’s Net Order Value surpassed food delivery for the first time, marking a significant shift in Eternal’s business mix.
🍔 Food Delivery – Steady Growth
Revenue: ₹2,261 Cr
+16.4% YoY
EBITDA Margin: 5.0% of NOV
vs 3.9% last year
🏢 Hyperpure (B2B) – Strong Momentum
Revenue: ₹2,295 Cr
+89.4% YoY
Strong growth driven by increased penetration across restaurant partners and deeper integration with quick commerce operations.
Brokerage Ratings & Price Targets
Jefferies
₹400
Rating: UPGRADED to Buy from Hold
Previous Target: ₹250
“Confidence in strategic direction supported by strong management commentary”
CLSA
₹385
Rating: Outperform
Previous Target: ₹350
“Quick commerce losses expected to peak”
Motilal Oswal
₹330
Rating: Buy
Previous Target: ₹310
“Generational opportunity in retail disruption”
Nuvama
₹320
Rating: Buy
Previous Target: ₹290
“Margin improvement expected from inventory-led model”
Nomura
₹300
Rating: Buy
Previous Target: ₹280
“Stronger profitability in quick commerce business”
Macquarie
₹150
Rating: Underperform
Previous Target: ₹150
“Concerns about competitive pressures and prolonged losses”
Analyst Sentiment:
Bullish
Consensus View: Out of 31 analysts covering Eternal, 25 maintain a ‘Buy’ rating with an average target price of ₹284.5, representing 10.6% upside from current levels. The bullish sentiment is driven by Blinkit’s rapid scale-up and expected margin expansion.
Market Outlook & Strategic Initiatives
📈 Key Growth Drivers
July 2025
Blinkit Store Expansion Target
Company reaffirms goal of reaching 2,000 stores by December 2025, up from current 1,544 stores. Management sees opportunity for 3,000+ stores long-term.
Q1 FY26
Inventory-Led Model Transition
Blinkit transitioning from 3P to 1P model expected to deliver 1% margin expansion as percentage of NOV over next 2-3 quarters.
June 2025
District App Growth
Going-out vertical now generates ₹8,000 crore annualized NOV, growing 30%+ YoY with average revenue per order above ₹160.
Strategic Focus
Market Share Gains
Delhi market still growing at 70%+ YoY in NOV despite being well-penetrated, indicating runway for expansion in mature markets.
💡 Management Guidance for FY26
- Food delivery NOV growth expected to be above 15%, trending toward 20% in FY27
- Quick commerce losses likely to have peaked with improving unit economics
- Transition to inventory-led model to drive margin expansion
- Focus on profitability while maintaining growth momentum
Risk Factors to Monitor
🔴 Competition Intensity
High Risk
🟡 Regulatory Challenges
Medium Risk
🟢 Market Opportunity
High Potential
Why Eternal Shares Surged Despite Profit Drop
The market’s enthusiastic response to Eternal’s Q1 results, despite the sharp profit decline, reflects several key factors that investors are prioritizing:
🚀 Revenue Momentum
The 70% YoY revenue growth significantly exceeded expectations, demonstrating the company’s ability to scale operations rapidly across all business segments.
📊 Market Leadership
Blinkit’s GOV surpassing food delivery marks a historic shift, positioning Eternal as the leader in India’s fast-growing quick commerce market.
🎯 Strategic Positioning
The transition to an inventory-led model and focus on unit economics suggest improving profitability ahead, justifying short-term investment sacrifices.
Frequently Asked Questions
Why did Eternal shares rise despite a 90% profit drop?
Investors focused on the strong 70% revenue growth and Blinkit’s impressive performance rather than short-term profitability. The market views current losses as strategic investments for long-term market leadership in quick commerce, a high-growth sector with significant potential.
What is driving Blinkit’s exceptional growth?
Blinkit’s growth is driven by rapid store expansion (1,544 stores vs 639 last year), increasing customer adoption (122% YoY growth in monthly transacting customers), and the transition to an inventory-led model that improves margins and customer experience.
What are analysts saying about Eternal’s target price?
Major brokerages have raised target prices post-Q1 results. Jefferies upgraded to ‘Buy’ with ₹400 target, CLSA maintained ‘Outperform’ at ₹385, and the average analyst target stands at ₹284.5, suggesting 10-45% upside potential from current levels.
When will Eternal return to strong profitability?
Management expects quick commerce losses to have peaked, with improving unit economics as stores mature. The inventory-led model transition should deliver 1% margin expansion over 2-3 quarters. Analysts expect PAT margins of 3.1% in FY26 and 6.5% in FY27.
What are the key risks for Eternal shares?
Key risks include intensifying competition in quick commerce, regulatory challenges, execution risks in rapid expansion, and potential delays in achieving profitability targets. The company also faces ongoing GST demands of ₹441 crore, though management is confident about its legal position.
Investment Thesis & Conclusion
🎯 Bottom Line for Investors
Eternal’s Q1 FY26 results validate the investment thesis around India’s quick commerce revolution. Despite short-term profitability pressures, the company is successfully capturing market share in a massive addressable market estimated at $50+ billion.
25+%
YTD Stock Returns
₹3T
Market Cap Milestone
2000+
Target Store Count
The overwhelming analyst support (25 out of 31 ‘Buy’ ratings) and significant target price upgrades post-results indicate strong institutional confidence. Key catalysts ahead include Blinkit’s store expansion, margin improvement from the inventory-led model, and potential market share gains in food delivery as competition stabilizes.
⚠️ Investment Consideration: While the long-term opportunity is compelling, investors should be prepared for continued earnings volatility as the company prioritizes growth over short-term profitability. The stock’s premium valuation (P/E of 483x) reflects high growth expectations that must be delivered consistently.
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