Eternal (Zomato) Soars Over 10% on Blockbuster Q1 Results: What's Fuelling the Rally?

Eternal Ltd., the parent company of Zomato and Blinkit, delivered a blockbuster performance on Dalal Street today, with its stock price rocketing over 10% even as the broader market remained sluggish. The company announced its Q1 FY26 results on Monday evening, and while the headline profit figure dipped, the underlying story of explosive growth has decisively captured investor confidence.

While the benchmark Nifty 50 and BSE Sensex indices closed almost flat, Eternal was the star of the show. The stock ended the day at ₹299.75 on the NSE, a massive gain of 10.32%. This surge was a direct reaction to the company’s quarterly earnings report, which painted a picture of a company firing on all cylinders, especially in its quick-commerce division.

Revenue Growth Steals the Show

At first glance, the numbers might seem mixed. Eternal reported a consolidated net profit of just ₹25 crore for the quarter ended June 2025. This is a significant drop from the same period last year, largely due to aggressive investments in expansion. However, investors wisely looked past this figure to focus on the more significant metric: revenue.

Revenue from operations soared by an incredible 70.4% year-on-year to reach ₹7,167 crore. This phenomenal growth tells the real story and is the primary catalyst for the stock’s rally. The market has clearly voted that for a growth company like Eternal, top-line expansion is currently far more important than short-term profitability.

The engine of this growth? None other than its quick-commerce arm, Blinkit.

Blinkit: The Jewel in Eternal’s Crown

The undisputed hero of Eternal’s Q1 performance is Blinkit. The quick-commerce segment has been on a tear, and the latest numbers confirm its spectacular trajectory.

Blinkit’s Net Order Value (NOV) grew by a staggering 127% year-on-year. To support this booming demand, the company has been aggressively expanding its footprint, adding 243 new stores in the quarter alone. This brings the total Blinkit store count to 1,544.

This aggressive expansion and the resulting revenue surge have convinced investors that Eternal’s big bet on quick commerce is paying off handsomely. Management has further fuelled this optimism with a confident outlook, projecting a recovery in the core food delivery business to over 15% growth for FY26 and a target of 2,000 Blinkit stores by the end of 2025.

The market’s positive reaction was echoed by several brokerage firms. Jefferies, for instance, upgraded the stock from ‘Hold’ to a “Buy” rating and raised its target price to ₹400, citing the strong revenue growth and the massive potential of the quick-commerce segment.

What This Means for Retail Investors

For retail investors, Eternal’s performance is a classic case study in looking beyond the headlines.

1. Growth Over Profit: It demonstrates that for high-growth companies in emerging sectors, the market often prioritizes revenue growth and market share expansion over short-term profitability.
2. The Power of a Subsidiary: The Blinkit acquisition, once met with skepticism, has now become the company’s primary growth driver. This highlights the importance of understanding a company’s different business segments and their individual performance.
3. Market Sentiment: Despite a flat overall market, a strong earnings report can cause a single stock to outperform significantly. Eternal was the top gainer in the Sensex pack on a day when most other stocks were subdued.

What to Watch Next

While the Q1 results have been a shot in the arm for Eternal, prudent investors should keep an eye on the following:

• Path to Profitability: While revenue growth is currently in focus, the company will eventually need to demonstrate a clear and sustainable path to improving its net profit.
• Blinkit’s Margins: Watch for commentary on the profitability of mature Blinkit stores. The management’s target of 5-6% EBITDA margins for these stores will be a key metric to track.
• Competition: The food delivery and quick-commerce spaces are intensely competitive. Any strategic moves by competitors could impact Eternal’s growth trajectory.
• Execution: The company’s ability to successfully manage its rapid expansion of Blinkit stores without compromising service quality will be crucial.

In conclusion, Eternal’s stellar stock performance is a powerful vote of confidence in its growth strategy, particularly its increasing dominance in the quick-commerce space. While the journey may have its bumps, the company’s ability to deliver such explosive revenue growth has made it a stock that cannot be ignored.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Please conduct your own research before making any investment decisions.