Eternal's profit falls 90% to Rs 25 crore Q1FY26, revenue jumps 70%

Deepinder Goyal-led Eternal (formerly Zomato) has reported a dramatic 90% year-over-year decline in consolidated net profit for the first quarter of fiscal 2026, even as revenue from operations surged 70%.

The company posted a net profit of Rs 25 crore for the quarter ended June 30, down from Rs 253 crore in the same period last year. Revenue rose to Rs 7,167 crore from Rs 4,206 crore, driven primarily by strong performance in Blinkit and its B2B platform, Hyperpure.

Despite robust top-line growth, Eternal’s profitability was hit by continued investments in its fast-growing quick commerce segment and “going-out” businesses. Adjusted EBITDA fell 42% year-over-year to Rs 172 crore, with CFO Akshant Goyal attributing the contraction to these investments. Food delivery margins improved to 5.0% of Net Order Value (NOV), up from 3.9% a year earlier. Total expenses rose to Rs 7,433 crore in Q1FY26, up from Rs 4,203 crore in the year-ago period.

“Margins in both food delivery and quick commerce tend to come under pressure in Q1 every year due to seasonal issues like monsoon disruptions and lower delivery partner availability,” said Zomato CEO Deepinder Goyal in a shareholder letter.

Blinkit overtakes Zomato in order volume

For the first time, Blinkit’s quarterly Net Order Value surpassed that of Zomato’s food delivery business. The NOV of Eternal’s B2C operations grew 55% year-over-year and 16% sequentially to Rs 20,183 crore. Blinkit’s contribution stood at Rs 9,203 crore, up 127% from the same period last year.

Average monthly transacting customers on Blinkit more than doubled to 16.9 million, as the company added 243 net new stores, bringing the total to 1,544. CEO Albinder Dhindsa reaffirmed Blinkit’s target of 2,000 stores by the end of the calendar year, and noted the company’s expanding warehousing footprint, now totaling 10.4 million square feet.

Though still loss-making, Blinkit narrowed its EBITDA margin loss to -1.8% of NOV, from -2.4% in the previous quarter.

Zomato’s food delivery NOV rose 13% year-over-year, a slight dip from the 14% growth seen in the prior quarter, reflecting continued weakness in consumer demand. Goyal said the business is unlikely to exceed 20% NOV growth in FY26, but expects growth to stay above 15% and trend higher in FY27.

Part of the sluggishness was attributed to increased restaurant-funded discounts, which inflated Gross Order Value but depressed NOV growth. The company acknowledged that such fluctuations are likely to persist as restaurant partners adjust promotional strategies to demand cycles.

Margins in the food delivery business, though higher on a year-over-year basis, declined sequentially, breaking a 14-quarter streak of continuous margin improvement.

Hyperpure and business model evolution

Hyperpure, Eternal’s B2B supply arm, posted 89% revenue growth to Rs 2,295 crore. However, the company anticipates near-term de-growth in this segment as it transitions to an inventory-led model for Blinkit. The move is expected to drive revenue growth within Blinkit while reducing reliance on B2B sales.

In a strategic shift, the Eternal board approved the incorporation of Blinkit Foods, a wholly owned subsidiary aimed at further deepening its footprint in the quick commerce space.

While margins face seasonal and competitive headwinds, Eternal’s leadership expressed confidence in its long-term trajectory. “Despite intense competition, a large portion of our business is already profitable, with some Blinkit cities clocking over 2.5% EBITDA margins,” said Dhindsa.

Goyal added that Eternal remains focused on scaling investments responsibly while maintaining its margin threshold in the 5% range. “There is no innovation in the space today that makes us believe the business is under threat,” he said.