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Eternal Q2 Report: High Growth, Short-Term Profit Pause

Eternal’s Q2 results wipe Rs 555 crore off Deepinder Goyal’s wealth. Analysts highlight short-term challenges despite long-term growth potential in Q-commerce.

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Manisha Sharma
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Eternal Q2 Report

Eternal, led by Deepinder Goyal, experienced a dramatic market reaction following its Q2 FY26 earnings. Shares dropped 4.2% to Rs 333.75, wiping out a notional Rs 555 crore from Goyal’s stake. The company, which operates Zomato, Blinkit, and the Going Out business, reported a mixed quarter, signalling strong revenue growth but short-term profit pressure.

Goyal holds a 3.83% stake, totalling 36.94 crore shares, whose value fell from Rs 12,887.16 crore to Rs 12,331.11 crore in minutes after the earnings announcement.

Revenue Growth Amid Elevated Investments

Eternal’s revenue from operations rose 183% YoY to Rs 13,590 crore, driven by expansion across quick commerce and food delivery. The company added 272 net new Blinkit stores, taking its network to 1,816, and aims to reach 3,000 stores by March 2027.

Despite growth, EBITDA declined 32% YoY to Rs 224 crore due to increased marketing spend and strategic investments. The Q2 numbers suggest that while revenue momentum is strong, profitability is being constrained by deliberate long-term expansion bets.

Analyst Perspectives

Brokerages remain divided on the short-term outlook:

  • Motilal Oswal Financial Services maintains a “buy” rating, citing market leadership in quick commerce and food delivery, with a target price of Rs 410. They acknowledge that profitability may take a backseat amid ongoing marketing and dark-store investments.

  • Nirmal Bang Institutional Equities praised Blinkit’s growth but noted elevated marketing expenses and losses in the Going Out segment, assigning a cautious near-term view with a target of Rs 402.

  • JM Financial expects that profitability focus in the coming quarters could trigger a sharp EBITDA ramp-up, maintaining a target price of Rs 450.

Strategic Initiatives and Expansion

Deepinder Goyal highlighted key business milestones in a LinkedIn post:

  • Blinkit NOV grew 137% YoY, its highest in ten quarters.

  • District, the Going Out vertical, expanded internationally to the UAE, onboarding 3,400 outlets across six cities.

  • Zomato’s food delivery business achieved its highest profit margin at 5.3% in NOV, surpassing Rs 500 crore in quarterly profits.

  • Hyperpure continues steady B2B growth, expected to turn profitable in the next two quarters.

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The company is prioritising long-term value creation, even as elevated investments push out short-term breakeven to 1QFY27.

Market Implications

Eternal’s Q2 results underscore the delicate balance between rapid growth and profitability in high-investment tech businesses. Analysts suggest investors focus on long-term growth potential in quick commerce and hyperlocal retail disruption while being mindful of near-term margin pressure.

While the Q2 performance temporarily impacted shareholder wealth, Eternal’s strategic bets on expansion, Blinkit growth, and international operations position it for potential long-term market leadership. Short-term profit pauses are part of the trade-off for scaling aggressively in a competitive landscape.