Eternal Limited (formerly Zomato Limited) has reported robust performance in its quick commerce segment and early signs of recovery in food delivery for the first quarter of fiscal year 2026. The company's management shared these insights during their Q1FY26 earnings conference call.

Quick Commerce Surge

Blinkit, Eternal's quick commerce arm, demonstrated impressive growth with Gross Order Value (GOV) exceeding ₹5,000 crore and Monthly Transacting Users (MTU) surpassing 15 million. The segment's adjusted EBITDA margins improved from -2.4% to -1.8% quarter-on-quarter, with some mature markets achieving 2.5% margins.

Albinder Singh Dhindsa, CEO of Blinkit, highlighted the company's expansion plans, stating, "We currently operate over 1,500 dark stores and have visibility to expand to 3,000 stores." This aggressive growth strategy underscores Eternal's commitment to strengthening its quick commerce presence.

Inventory Ownership Transition

In a significant move, Eternal plans to transition most of its inventory to first-party ownership within two to three quarters. Akshant Goyal, CFO of Eternal Limited, explained, "We expect this transition to result in a 100 basis points margin improvement." This shift is anticipated to streamline operations and enhance profitability.

Food Delivery Recovery

While quick commerce showed stellar performance, the food delivery segment also displayed encouraging signs. The company reported improved app engagement and higher customer return rates in the first three weeks of the quarter, indicating a potential turnaround after several quarters of subdued growth.

Akshant Goyal expressed optimism about the food delivery segment, stating, "We believe that food delivery growth has bottomed out, and we expect to see better growth from here on."

Market Performance

Delhi, a mature market for Eternal's quick commerce business, demonstrated robust growth with a 70% year-on-year increase. This performance in a well-established market suggests strong potential for sustained growth in the quick commerce segment.

Looking Ahead

Management expects margin improvements in quick commerce, contingent on stable competitive conditions. The company remains focused on maintaining its leadership position while providing the best service to customers.

Eternal Limited's Q1FY26 results reflect a company in transition, with strong growth in its quick commerce segment and nascent signs of recovery in food delivery. As the company continues to expand its quick commerce operations and optimize its inventory management, investors will be watching closely to see if these strategies translate into sustained growth and improved profitability across all segments.

Financial Results

The company's strategic moves in inventory management and expansion of dark stores, coupled with the early signs of recovery in food delivery, position Eternal Limited for potential growth in the coming quarters. However, the management remains cautious, acknowledging the competitive nature of the market and the need to adapt to changing circumstances.

Eternal Ltd , a prominent player in the food delivery sector, has seen its shares surge to unprecedented levels following the release of its latest quarterly earnings report. The stock price climbed nearly 4% to reach a new lifetime high, continuing a remarkable 15% rally that began on Monday.

Strong Revenue Performance

The company reported a robust quarterly revenue of ₹7,167.00 crore, representing a significant 23% increase quarter-on-quarter. This impressive figure surpassed analyst expectations, which had projected revenues of ₹6,624.00 crore. The outperformance in revenue has been a key driver behind the stock's recent momentum.

Earnings Highlights

While revenue growth was stellar, Eternal Ltd's net profit for the quarter showed a decline:

Despite the drop in net profit, which fell short of consensus forecasts, investors appear to be focusing on the company's top-line growth and market expansion.

Segment Performance

The adjusted consolidated revenue painted an even more impressive picture, with a 22% increase quarter-on-quarter and a substantial 70% surge year-on-year. This growth was primarily fueled by strong performances in two key divisions:

1. Blinkit
2. Hyperpure

B2C Vertical Strength

Eternal Ltd's B2C vertical has demonstrated significant scale, generating an annualized net order value of nearly $10 billion. Notably, the Blinkit division contributes close to half of this value, underscoring its importance to the company's overall business model.

Stock Performance and Analyst Sentiment

The market's positive reaction to Eternal Ltd's results is evident in the stock's performance:

• 15% rally since the earnings release
• 14% spike on July 22
• 39.67% gain over the past 12 months

Analyst sentiment remains largely bullish:

• Out of 32 analysts covering the stock:
  • 28 maintain a 'buy' rating
  • 4 suggest a 'sell' rating
• The average 12-month consensus price target implies a marginal 1% downside from current levels.

As Eternal Ltd continues to expand its market presence and drive revenue growth, investors and analysts alike will be closely monitoring the company's ability to translate top-line success into improved profitability in the coming quarters.