Eternal Ltd, the parent company of Zomato and Blinkit, shares fell by nearly 2% a day after its announcement of revenues for Q2 FY26 showed strong revenue growth, but a decline in profitability. The share opened on the BSE at Rs. 340.30, hit an intraday high of Rs. 347.75, and a low of Rs. 333.75, highlighting a volatile sentiment.
Eternal Ltd declared a consolidated net profit of Rs. 65 crore for the quarter that ended in September 2025, which is down 63% from Rs. 176 crore in the same quarter last year.
The decline in profits was mainly due to lower EBITDA margins, which dropped from 4.7% a year ago to 1.8% this quarter, along with rising inventory costs.
Although the earnings declined, the company's revenue surged threefold to Rs. 13,590 crore from Rs. 4,799 crore in Q2 FY25, far ahead of analysts' expectations of Rs. 8,600 crore. Most of this growth was driven by its quick commerce arm, Blinkit, as it benefited from its transition to an inventory-led model.
Revenue for the quick commerce segment continued to be Eternal's growth engine, with revenue increasing 756% YoY to Rs. 9,891 crores from Rs. 1,156 crores.
The food delivery segment continued to show steady growth, growing 23% YoY, to Rs. 2483 crores, while the dining and entertainment segment expanded to Rs. 189 crores, representing a 24% increase YoY.
However, Hyperpure, which is Eternal's vertical for B2B supplies, saw a 31% decline to Rs. 1,023 crore, based on the company placing more emphasis on quick commerce.
Eternal's Net Order Value (NOV) for Blinkit increased 137% YoY to Rs. 11,679 crore, with a clear indication of consumer demand for quick commerce.
Market analysts had divided views regarding Eternal’s outlook. Brokerages like Motilal Oswal, UBS, Bank of America, Emkay, and Nuvama quoted ‘Buy’ ratings with a target price of Rs. 400-Rs. 430, citing Eternal being an established player in Q-commerce and food delivery.
However, Macquarie upheld its Underperform rating with a target of Rs. 200, pointing to competitive pressures and valuation concerns.
As per Motilal Oswal Financial Services, the target price of Rs. 410 for this stock implies a 17% upside from current levels. The brokerage expects profitability to remain under pressure in the short term but sees long-term opportunities from Blinkit’s expansion and Eternal’s leading market position.
Analysts are expecting volatility in the near term. Rajesh Bhosale of Angel One highlighted Rs. 320-Rs. 310 as a strong buying zone, while Rs. 360-Rs. 370 may act as resistance.
Overall, while Eternal’s Q2 results highlight robust growth momentum in quick commerce and food delivery, the margin compression has tempered investor sentiment. Nonetheless, most brokerages believe the long-term potential remains intact..