Headline Summary
Eternal Ltd. (formerly known as Zomato) saw its share price surge nearly 10% after reporting its Q1 FY26 results. The results were a mixed bag — with strong revenue growth but a sharp 90% fall in net profit.
But why is the market cheering? And should investors consider buying the stock now?
Q1 FY26 Key Financial Highlights
| Metric | Q1 FY26 | Q1 FY25 | YoY Change |
|---|---|---|---|
| Revenue | ₹7,167 crore | ₹4,206 crore | ▲ 70% |
| Net Profit (PAT) | ₹25 crore | ₹253 crore | ▼ 90% |
| Blinkit Revenue | ₹2,400 crore | ₹941 crore | ▲ 155% |
| Blinkit NOV | ₹9,203 crore | ₹4,000+ crore | ▲ Huge |
| Food Delivery NOV | ₹8,967 crore | ₹8,100+ crore | ▲ ~10% |
Why Did the Stock Rally?
Despite the fall in profits, the market celebrated Eternal’s results. Here’s why:
1️⃣ Blinkit Overtook Zomato in Net Order Value (NOV)
- Quick commerce segment (Blinkit) outperformed food delivery for the first time.
- Revenue doubled and order volume surged.
2️⃣ Long-Term Growth Focus
- Eternal is prioritizing scale and market capture over short-term profitability.
- Investors see Blinkit as a future growth engine.
3️⃣ Margin Outlook Still Positive
- EBITDA loss in Blinkit narrowed slightly.
- Eternal maintains a strong cash position and improving unit economics.
4️⃣ Broker Confidence
- UBS Target: ₹315
- Nomura: Bullish on quick commerce
- Motilal Oswal: “Buy for long-term; expect Q3 margin rebound”
Expert View: Should You Buy Eternal Stock?
Reasons to Consider Buying:
- Leadership in quick commerce, a rapidly growing sector.
- Strong revenue visibility across both food delivery and groceries.
- Brand recall from Zomato legacy + Blinkit momentum.
- High investor confidence and institutional support.
Risks to Watch:
- Profit pressure due to expansion costs.
- Blinkit is still not EBITDA positive.
- Competition from Swiggy Instamart, Zepto, etc.
DKTV Verdict: Long-Term Buy (with Caution)
Eternal is clearly betting big on India’s next frontier: instant grocery delivery. While short-term profits are under pressure, the 10% stock rally shows the street is optimistic.
👉 If you’re a long-term investor, Eternal could be a strategic buy on dips — especially below ₹280–₹290.
