Higher tax eats into Eternal's Q1 profit despite robust revenue, EBITDA growth

Eternal Ltd. reported a 47.1% sequential decline in consolidated net profit for the June quarter as a higher tax outgo offset strong growth in revenue and operating profit, while its food delivery and quick commerce businesses continued to deliver robust growth.

The company posted a consolidated net profit of ₹92 crore for the quarter ended June 30, compared with ₹174 crore in the March quarter. Revenue from operations rose 16.9% sequentially to ₹20,211 crore from ₹17,292 crore, while EBITDA increased to ₹594 crore from ₹486 crore. EBITDA margin improved to 2.9% from 2.8% in the previous quarter.

The decline in profit came despite improved operating performance as the company reported a substantially higher tax expense during the quarter, along with higher depreciation and finance costs.

Tax expenses more than tripled to ₹180 crore during the quarter from ₹54 crore in the preceding three months, while depreciation and amortisation rose to ₹311 crore from ₹233 crore. Finance costs also increased to ₹96 crore from ₹77 crore. The higher expenses more than offset the company's improved operating performance, leading to a sequential decline in net profit.

Food delivery, Blinkit continue to drive growth

In its shareholder letter, CFO Akshant Goyal highlighted strong momentum across Eternal's consumer businesses. Consolidated B2C net order value (NOV) grew 54% year-on-year to ₹31,120 crore, while adjusted revenue surged 173% year-on-year to ₹20,648 crore, aided by the transition to the inventory-led model in quick commerce. Consolidated adjusted EBITDA jumped 223% year-on-year to ₹555 crore.

Food delivery continued to strengthen, with NOV rising 20% year-on-year to ₹10,769 crore, marking the fifth consecutive quarter of accelerating growth. Adjusted EBITDA from the segment increased 34% year-on-year to ₹606 crore, with margins improving to 5.6% of NOV.

Blinkit remained the company's fastest-growing business, recording an 86% jump in NOV to ₹17,132 crore while adding 200 net new stores during the quarter, taking its network to 2,443 stores. The quick commerce business reported ₹102 crore in adjusted EBITDA, compared with a loss in the year-ago period.

Commenting on Blinkit's performance, Eternal Group CEO Albinder Dhindsa said the acceleration in NOV growth was largely driven by seasonality, while the company continued to focus on expanding assortment, geographic reach and demand density. He added that premium "gourmet" stores launched in select locations across the top eight cities would further strengthen the platform's product offering.

"As these efforts compound over time, we expect NOV growth to remain robust," he said.

On the food delivery business, Eternal founder and non-executive director Deepinder Goyal said the company does not see growth and profitability as competing objectives.

He said the business has witnessed five consecutive quarters of accelerating year-on-year growth while maintaining healthy margins. "We don't think about it as a trade-off. If we're doing our job well, growth and margins should compound together. If there comes a point where we have to spend margin to grow, we will – without hesitation. But right now, we don't need to make any trade-off," he said, adding that the company remains focused on balancing customer experience, restaurant partner success and profitability.

Nugget business transferred as part of internal restructuring

Separately, Eternal's board approved the transfer of its 'Nugget by Zomato' business to wholly owned subsidiary Carthero Technologies Private Ltd. as part of an internal restructuring exercise aimed at streamlining the corporate structure. The AI-driven B2B support platform generated ₹7.2 crore in revenue during FY26 and had a net worth of ₹10.54 crore as of March 31, 2026. The business will be transferred for a cash consideration of ₹35 crore, with the transaction expected to be completed within 30 days.

Shares of Eternal Ltd closed 1.01% higher at ₹289.50 on the NSE on Wednesday, recovering from intraday losses after the earnings announcement. The stock has declined over 3% in the past year, broadly in line with the benchmark Nifty 50, which has fallen nearly 4% over the same period.