The stock market can often feel like a rollercoaster ride — thrilling for some, nerve-wracking for others. But every once in a while, a story pops up that forces investors to take notice. Enter Eternal, formerly known as Zomato. On July 22, Eternal’s stock surged a solid 10%, hitting the upper circuit. The surprising part? This spike came right after the company posted a shocking 90% year-on-year drop in net profit for Q1 FY26. Sounds contradictory, right?
Let’s dig into this twisty tale — profits down, revenues up, Blinkit booming, and brokerages in disagreement. Is this the time to buy, sell, or simply hold your position in Eternal?
Eternal’s Profit Takes a Hit — But Is That the Whole Story?
At first glance, the numbers look grim. In the April-June quarter of FY26, Eternal posted a net profit of just ₹25 crore, a steep fall from ₹253 crore in the same quarter last year. That’s a 90% decline, and on paper, it’s enough to send alarm bells ringing.
But wait — here’s the twist. Revenue actually grew by 70% year-on-year, reaching a hefty ₹7,167 crore. That’s a big deal.
So how do we make sense of this? It’s like a restaurant making more food than ever but ending up with less money in the till — clearly, something deeper is happening.
Blinkit Outpaces Zomato: A Game-Changing Shift
The real kicker? Blinkit, Eternal’s quick-commerce arm, outperformed the traditional food delivery business. Blinkit clocked in a revenue of ₹2,400 crore in Q1, while Zomato’s food delivery revenue came in at ₹2,261 crore.
That’s the first time Blinkit has taken the lead, and that shift could redefine the company’s long-term strategy.
According to Eternal’s CFO, Akshant Goyal, “Our B2C operations have now reached nearly $10 billion in annualised NOV, with quick commerce contributing nearly half of it.” Translation? Blinkit is quickly becoming the crown jewel in Eternal’s empire.
Stock Soars: What Triggered the Rally?
Despite the profit plunge, investor sentiment was lifted by upbeat management commentary. On July 22, Eternal’s share price hit ₹298.85 at 9:15 a.m., marking a 10% rise from the previous day.
This came on the heels of a 7% gain in the earlier session, making it clear that investors were reacting to future potential, not just past earnings.
Consolidated EBITDA: The Mixed Bag
Looking at the EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization), Eternal posted ₹115 crore in Q1 FY26. While that might seem decent, it actually marks a 35% decline from the same quarter last year.
It’s a mixed signal — revenue up, Blinkit booming, but operating profitability tightening. Clearly, there are growing pains in Eternal’s transformation journey.
What Are Analysts Saying? Brokerages Divided
When in doubt, follow the money — or in this case, the brokerages. But even the experts can’t seem to agree.
Bullish Voices:
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Jefferies upgraded Eternal to a ‘Buy’ with a raised target price of ₹400/share, citing positive long-term potential.
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CLSA retained its ‘High-Conviction Outperform’ rating, with a target of ₹385/share, thanks to Blinkit’s unexpected strength.
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Bernstein also stayed bullish, increasing its target to ₹320/share, impressed by the quick-commerce performance.
Bearish Tone:
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Macquarie stood out as the lone pessimist, slapping an ‘Underperform’ tag with a low-ball target of ₹150/share. Their reasoning? Food delivery growth was underwhelming, and quick commerce, while promising, remains a highly competitive battleground.
Eternal’s Growth vs. Profitability Tug of War
Let’s put this into perspective. Eternal is like a sprinter who just ran a personal best but twisted an ankle in the process. Revenue is growing at a thrilling pace, especially with Blinkit, but profitability has taken a hit.
This isn’t uncommon for tech-forward companies expanding aggressively — think Amazon or Uber in their earlier years. Eternal appears to be betting big on scaling first and refining margins later.
Blinkit vs. Zomato: Internal Competition or Strategic Shift?
With Blinkit outpacing Zomato, a critical question arises — is Eternal now a quick-commerce company with a food delivery side hustle?
It certainly feels that way. Blinkit’s performance signals a shift in consumer preference toward instant deliveries over traditional food orders. And Eternal is smartly riding that wave.
But internal balancing is key — Zomato is still a major revenue driver, and neglecting it could risk alienating a loyal customer base.
Should You Buy, Sell, or Hold Eternal Shares?
Now for the million-rupee question — what should investors do?
Buy if:
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You believe in Blinkit’s long-term dominance.
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You’re in for the long haul and can stomach short-term volatility.
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You trust the management’s growth narrative.
Sell if:
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You’re spooked by the sharp drop in profit.
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You think quick commerce will remain cutthroat and unprofitable.
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You’re looking for short-term returns.
Hold if:
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You’re undecided but don’t want to miss out on potential upside.
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You want to see how Q2 numbers look before making a move.
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You’re okay riding the volatility wave while keeping your capital intact.
Risks That Investors Need to Watch Out For
Every stock has its risks — Eternal is no exception.
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Razor-thin margins in quick commerce could persist.
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Competition from Swiggy Instamart, Zepto, and others remains fierce.
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Execution missteps in scaling Blinkit could dent investor confidence.
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Profitability pressures could weigh down stock performance despite revenue growth.
Eternal’s Strategic Future: What’s Next?
It seems clear now — Eternal is doubling down on quick commerce. Expect more investments in Blinkit, expanded delivery hubs, and possibly new product categories.
They’re betting that instant delivery is not just a trend, but the future of urban retail. If that plays out, Eternal could become India’s answer to Amazon Prime Now — fast, reliable, and everywhere.
Final Verdict: Eternal Might Be Down, But It’s Not Out
Sure, the profit numbers were a gut-punch. But Eternal is playing the long game. Blinkit’s rapid rise could be a glimpse into a high-growth future — if it manages to tame its cost structure.
So while the stock has run up recently, long-term investors might still find value in the Eternal story — especially if you believe in the power of instant gratification and 10-minute grocery deliveries.
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Conclusion
The market is often forward-looking, and Eternal’s recent stock surge is proof of that. The company’s pivot toward Blinkit and quick commerce may come with bumps, but it’s also filled with potential. While profits took a hit this quarter, the narrative has shifted from delivery to domination — especially in the quick-commerce space.
If you’re an investor, the decision to buy, sell, or hold comes down to one question: Do you believe Eternal can become the king of convenience in India?
