Eternal (formerly Zomato) caught the Dalal Street off guard as its share price kept climbing despite a whopping 90% drop in Q1 net profit.
At the time of publication, Eternal’s share price is trading at Rs 299.75, 10.32% up from its previous close and very close to its 52-week high of Rs 311.25.
The company posted a sharp 90% drop in net profit for Q1 FY26 at Rs 25 crore versus Rs 253 crore a year ago, but the stock didn’t flinch.
Instead, it powered to record highs, as investors looked past the bottom line and doubled down on the broader growth narrative.
Why Eternal’s share price is climbing?
What really stole the spotlight was revenue.
The company’s topline jumped 70% year-on-year to Rs 7,167 crore, thanks largely to Blinkit.
The quick commerce arm more than tripled its revenue to Rs 2,400 crore this quarter, officially overtaking the traditional food delivery business for the first time.
The rise of Blinkit is starting to reshape Eternal’s identity. Once known primarily for food delivery, the company is now leaning heavily into quick commerce, and investors are paying attention.
Blinkit’s rapid growth, with its annual order value climbing to $10 billion, has turned it into Eternal’s main engine of expansion.
That momentum seems to be outweighing concerns about falling profits, as the market shifts focus from short-term earnings to the company’s longer-term play in India’s evolving digital consumer landscape.
What’s behind net profit drop?
Eternal’s sharp drop in profits is largely the result of its ongoing push to expand Blinkit and move into new areas like ticketing and events.
These bets are expensive, with upfront spending on logistics, tech, and marketing continuing to drag down net margins.
Even so, there are early signs that the company’s investments are starting to pay off.
Margins in the core food delivery business improved to 5.0% from 3.9% a year ago, and Blinkit also managed to trim its losses while boosting efficiency, a promising trend as it scales up.
What analysts say?
Jefferies and Bernstein have turned more optimistic on Eternal, bumping up their ratings and price targets after Blinkit’s latest numbers blew past expectations.
The quick commerce arm’s blistering pace of growth caught the Street’s attention, with analysts calling it the company’s clear engine of momentum.
But the verdict isn’t unanimous. A few brokerages flagged continued pressure on margins and questioned whether the current valuation leaves enough room for upside.
Still, most are staying constructive. As of Tuesday, 28 of the 32 analysts tracking the stock maintained a ‘Buy’ rating, signaling that, for now, the market is willing to back Blinkit’s scale-up story, even if profitability takes a back seat.
Eternal CEO Deepinder Goyal struck an assured tone after the earnings release, making it clear the company isn’t chasing short-term profit at the expense of long-term growth.
He framed Blinkit’s rapid expansion and its shift to an inventory-led model not as a cost burden, but as a strategic move to cement leadership in a space that’s still taking shape.
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