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?
Lets 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 ¹25 crore, a steep fall from ¹253 crore in the same quarter last year. Thats a 90% decline, and on paper, its enough to send alarm bells ringing.
But wait heres the twist. Revenue actually grew by 70% year-on-year, reaching a hefty ¹7,167 crore. Thats 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 ¹2,400 crore in Q1, while Zomato’s food delivery revenue came in at ¹2,261 crore.
Thats the first time Blinkit has taken the lead, and that shift could redefine the company’s long-term strategy.
According to Eternals 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, Eternals share price hit ¹298.85 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 ¹115 crore in Q1 FY26. While that might seem decent, it actually marks a 35% decline from the same quarter last year.
Its a mixed signal revenue up, Blinkit booming, but operating profitability tightening. Clearly, there are growing pains in Eternals transformation journey.
What Are Analysts Saying? Brokerages Divided
When in doubt, follow the money or in this case, the brokerages. But even the experts cant seem to agree.
Bullish Voices:
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Jefferies upgraded Eternal to a Buy with a raised target price of ¹400/share, citing positive long-term potential.
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CLSA retained its High-Conviction Outperform rating, with a target of ¹385/share, thanks to Blinkits unexpected strength.
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Bernstein also stayed bullish, increasing its target to ¹320/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 ¹150/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
Lets 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 isnt 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. Blinkits 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 Blinkits 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 managements growth narrative.
Sell if:
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Youre spooked by the sharp drop in profit.
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You think quick commerce will remain cutthroat and unprofitable.
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Youre looking for short-term returns.
Hold if:
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Youre undecided but dont 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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Youre 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.
Eternals 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.
Theyre betting that instant delivery is not just a trend, but the future of urban retail. If that plays out, Eternal could become Indias answer to Amazon Prime Now fast, reliable, and everywhere.
Final Verdict: Eternal Might Be Down, But Its Not Out
Sure, the profit numbers were a gut-punch. But Eternal is playing the long game. Blinkits 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 Eternals recent stock surge is proof of that. The companys 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 youre 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?
