Zomato-parent Eternal’s Q1 revenue jumps 70%, shares surge 7.5%

The 70% revenue jump in Zomato’s Q1 FY26 showcases a strong performance amid ongoing challenges in the food delivery market.

Introduction

The parent company of Zomato, Eternal Ltd has managed to record some positive feedbacks despite encountering various problems in this year that was dominated by financial turbulence in many companies. Now under the new brand name Eternal (it temporarily operated under the name of Zomato until March 2025), the company has shown a great increase of 70 per cent in revenue during the first quarter of FY26, and a 7.5 per cent rise in shares. But, it has recorded a humongous 90 percent year-on-year (YoY) decline in its net profit and the increased cost of operations at its quick commerce arm, Blinkit, is the main reason.

Q1 Financials

In the first quarter (Q1) of the financial year 2025-26 (FY26), Eternal Ltd has shown an upward growth of 70.4 percent in revenues, i.e. to Rs 7,167 crore this year, as compared to a growth of 4,206 crores in the same quarter last year. This increment in revenue could largely be attributed to the rise in demand on its core food delivery platform as well as the check meteoric growth of its quick commerce subsidiary, Blinkit. In spite of this increase, the consolidated net profit of the company declined massively by 90%, i.e., to Rs 25 crore vs Rs 253 crore in Q1 FY25.

A rapid growth of Blinkit has contributed the most to this decrease in profitability as it had to expand its operations costing it big time.

Performance of Zomato’s Food Delivery Business

Food delivery in Zomato has also been performing consistently in the first quarter. The comparative revenue increased by 17.7 per cent YoY to reach Rs 2,657 crore against Rs 2,256 crore in the previous year. Sequentially, this marked a 10 percentage points growth on the level recorded in the previous quarter, showing that the demand on food delivery services remains stable in spite of the slowdown in the industry.

Gross order value (GOV) of food ordering through delivery also rose by 10 per cent on an annual basis, up to Rs 9,264 crore in Q1 FY25 to Rs 10,769 crore in Q1 FY26. Moreover, the monthly deliberately transacting customers (MTCs) of food delivery rose to 22.9 million, against 20.3 million registered last year. It indicates a good-looking growth in customers, despite what the food delivery business has had to go through.

Blinkit Performance Q1 FY26

As Zomato continued to grow through the food delivery business, the quick commerce business in form of Blinkit posted a YoY growth of 155 percent to reach Rs 2400 crore in revenues, up by Rs 942 crore in the first quarter of financial year 25. Nonetheless, the firm recorded an EBITDA underreport of Rs 162 crore, compared to Rs 3 crore in the previous year, since the growth of the dark stores was too fast, which created a significant hike in its working costs. These losses notwithstanding, the gross order value (GOV) of Blinkit increased to Rs 11,821 crore, and it was higher compared to the previous year of Rs 4,923 crore.

Revenue Breakdown by Different Sectors

Going Out Business: Fall in Revenues The Going Out business of Zomato, in which the company is involved with restaurant discovery and reservations, experienced a 10 percent fall in revenues (YoY) at Rs 207 crore. But the gross order value (GOV) of this segment increased to Rs2,370 crore as compared to Rs 2,184 crore in the last quarter. This implies that although food delivery is still hot, other food delivery services like restaurant discovery could be screeching to a halt.

Hyperpure: B2B Sector of the Supply Sector Development

Zomato hyperpure, a company that provides restaurants with fresh ingredients, grew by 89 percent on a year-over-year basis and earned Rs 2295 crore during the first quarter of financial year 26. This vertical can still be promising, as it can make Zomato business somewhat different than only delivering food and offering quick commerce.

The Spike in the Expenses of Zomato

With the spectacular revenue growth, the total expenses of Eternal Ltd increased by 79 percent, reaching Rs 7,433 crore in Q1 FY25 compared to Rs 4,203 crore in Q1 FY 25. This growth occurred mainly because of increase in expenses incurred in its fast growing business (in its dark stores network). Although the expansion strategy will, in the long run, result in an upsurge in revenue, it has resulted in enormous pressure on short-term profitability.

Stock performance of Eternal

The shares of Eternal Ltd soared nearly 7.5 percent to Rs 277 after the Q1 FY26 results, which was the highest in more than a month since February 3. The shares of Blinkit fetched good value in spite of the losses already incurred by the investors. This boost in share price portrays the belief that Eternal can manage its business issues and take advantage of its ever-growing enterprises.

Comparative to the Results of Last Year Q1

Observing the results of Q1 FY26 in contrast to the same season in FY25, Eternal Ltd experienced an impressive increase in revenues, which causes the net profit to drop drastically, which is alarming to investors and analysts. The company experienced a huge growth in both its food delivery revenue and quick commerce revenue, however, costs associated with the expansion of Blinkit have caused a heavy burden on its profitability.

Seven Problems of the Quick Commerce Arm of Zomato

Although Blinkit has significantly increased its revenue, the company still has to deal with the issue of high operating expenses, particularly as a result of its extremely fast development of the dark store network. With increased territories, Blinkit is piling up losses which are impacting on its bottom line. All these are the issues that the company should deal with to make Blinkit a lucrative undertaking going forward.

Conclusion

Through the first-quarter, Eternal Ltd mixed findings. Although the firm has witnessed a massive rise in revenue, especially through its food delivery and quick commerce businesses, it has experienced a drawback in the form of growing operational expenses. The 90 percent decline in net profit as a result of rampage by Blinkit is a big issue. But the cash balance has been positively accumulating and the customer base has been increasing which makes a good base on which the company can be expanded.

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