Zomato Eternal Q1 Results FY26: Blinkit Growth Fuels Stock Surge Despite 90% Profit Drop
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| Zomato Eternal Q1 FY26: Revenue Up 70%, Profit Down 90%, |
📈 Introduction: Zomato Eternal Q1 Results Surprise the Market
Eternal Ltd., the parent company of Zomato and Blinkit, released its Q1 FY26 results (April–June 2025), revealing a fascinating paradox in the business world. Despite a massive 90% YoY drop in net profit, Zomato shares surged over 15%, reaching a record high of ₹311.25. The market’s optimism highlights investor confidence in Eternal’s quick commerce strategy, primarily driven by Blinkit.
Let’s break down what the Q1 FY26 results really tell us about Eternal Ltd.’s performance and what it means for Zomato share investors.
📊 Zomato Eternal Q1 Results: Revenue Soars, Profit Dips
🔹 Key Financial Highlights
- Consolidated Revenue: ₹7,167 crore (up 70% YoY)
- Net Profit: ₹25 crore (down 90% YoY from ₹253 crore)
- EBITDA: ₹115 crore (35% YoY decline)
- EBITDA Margin: 1.6% (vs. 19.2% expected)
While revenue growth outperformed analyst expectations (Kotak and Bloomberg had forecasted ₹6,600–6,800 crore), the profit numbers shocked many at first glance. However, the underlying reasons point to intentional strategic investments, especially in Blinkit’s fast-growing business.
🚀 Blinkit Leads the Charge: Quick Commerce Outpaces Food Delivery
For the first time, Blinkit’s quarterly revenue of ₹2,400 crore surpassed Zomato’s food delivery revenue of ₹2,261 crore. This marks a pivotal shift in Eternal’s business model, with quick commerce becoming the largest revenue contributor.
Key Blinkit Metrics:
- Revenue Growth: 155% YoY
- Order Volume: 127% YoY increase
- Monthly Transacting Customers: 123% YoY growth
- Store Expansion: 1,544 total, aiming for 2,000 by December 2025
- Adjusted EBITDA Margin: Improved to -1.8% from -2.4%
Despite operating losses, Blinkit’s unit economics are improving steadily, and the platform is expanding aggressively. This high-growth potential is what’s fueling the Zomato share price rally.
📉 Why Profits Fell: The Inventory Model Shift
The sharp profit drop is largely due to heavy investments and a strategic shift in Blinkit’s model:
- Blinkit moved from a marketplace to inventory-led model, leading to higher product purchasing and warehousing costs.
- Cost of Goods Sold (COGS) surged 129% YoY.
- Advertising and Delivery Expenses also rose sharply to support expansion.
- Losses from newer verticals (Blinkit, Hyperpure, and the dining/events segment) further impacted net profit.
This is a classic “invest now, profit later” strategy, which many investors see as a long-term win — hence the market cheer.
🍽️ Zomato Food Delivery: Stable Growth, Rising Margins
While Blinkit stole the spotlight, Zomato’s food delivery continues to be a stable and profitable segment:
- Revenue: ₹2,261 crore (up 16% YoY)
- Adjusted EBITDA Margin: 5.0% (vs. 3.9% a year ago)
- Net Profit (Zomato India): ₹602 crore (up 28% YoY)
Margins dipped slightly QoQ due to seasonal factors, but long-term outlook remains strong with management expecting 15–20% YoY growth in FY26–27.
🧩 Eternal’s Ecosystem Strategy: Acquisitions & New Verticals
Eternal is actively building a diverse digital ecosystem:
- Acquired movie ticketing and event businesses from Paytm for ₹2,014 crore.
- Launched Blinkit Foods — a new vertical for food services.
- Hyperpure (B2B supplies) saw 89% YoY revenue growth, but near-term decline expected.
These moves reflect Eternal’s goal to own the entire food and lifestyle experience, from delivery to dining and events.
📈 Zomato Share Price Rally: Why Investors Are Bullish
Despite weak headline profits, Zomato shares surged 15% post-results, adding ₹40,000 crore to Eternal’s market cap.
Top reasons for investor optimism:
- Blinkit’s explosive growth and narrowing losses
- Improved visibility on margins
- Aggressive store and customer expansion
- Bullish brokerage ratings from UBS, Citi, Jefferies, Bernstein, and CLSA
Latest Zomato Share Price:
-
₹311.25 (July 22, 2025) — All-time high
This signals the market’s belief in long-term profitability, not just short-term earnings.
⚠️ Dissenting View: Macquarie’s Warning
Macquarie remains cautious, retaining an “Underperform” rating with a ₹150 target. Their concerns include:
- Unproven long-term economics for Blinkit
- High competition in quick commerce
- Rising employee costs and segmental losses
Their conservative stance stands in contrast to the broader Street optimism.
🔮 What Lies Ahead for Zomato and Blinkit?
Eternal’s management has made it clear: market share now, profits later. With Blinkit expected to reach 2,000+ stores by December, and a goal of reaching 5–6% EBITDA margins, the company is banking on scale-driven profitability.
As Zomato’s food delivery stabilizes and Blinkit continues to expand, the next 2–3 quarters will be crucial to validate this growth strategy.
🧠 Final Thoughts: Long-Term Bet, Short-Term Volatility
The Zomato Eternal Q1 results might seem confusing at first — falling profits and rising stock prices. But the story underneath is clear:
Investors are betting on Eternal Ltd.'s vision — where Blinkit leads a quick commerce revolution, and Zomato powers a broader lifestyle ecosystem.
Whether you’re a Zomato share investor, a financial analyst, or a curious observer of Indian startups, Eternal’s journey is one to watch.
✅ Summary of Q1 FY26 (April–June 2025):
| Metric | Value |
|---|---|
| Revenue | ₹7,167 crore (70% YoY ↑) |
| Net Profit | ₹25 crore (90% YoY ↓) |
| Blinkit Revenue | ₹2,400 crore |
| Zomato Revenue | ₹2,261 crore |
| EBITDA Margin | 1.6% |
| Zomato Share Price | ₹311.25 (as of July 22, 2025) |
💬 What do you think about the Zomato Eternal Q1 results? Will Blinkit be India’s biggest quick commerce success?
Let us know in the comments or connect with us for more financial insights.
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