Eternal Q2: Net profit doubles to ₹125 crore, misses estimates as costs rise

Eternal, the parent of Zomato and Blinkit, reported a sharp rise in revenue and profitability in the September quarter, led by continued growth in quick commerce. However, consolidated net profit fell short of analyst estimates as the company’s expenses rose alongside its expanding operations.

Net profit increased 92.3% year-on-year to ₹125 crore in Q2 FY27, compared with ₹65 crore a year earlier. Revenue from operations surged 77.6% to ₹24,138 crore from ₹13,590 crore. Total expenses rose 74.9% to ₹24,166 crore.

EBITDA stood at ₹752 crore, compared with ₹239 crore in the year-ago quarter, while the EBITDA margin improved to 3.1% from 1.8%. The net profit, however, missed the reported average analyst estimate of ₹271 crore, with higher delivery, employee and depreciation costs weighing on earnings.

Blinkit continues to improve profitability

Blinkit remained a key growth driver, with net order value (NOV) rising 79.3% year-on-year to ₹20,940 crore. The quick-commerce platform added 308 stores during the quarter, taking its total network to 2,751.

Its adjusted EBITDA margin improved for the sixth consecutive quarter to 0.9% of NOV. Adjusted EBITDA stood at ₹184 crore, compared with a loss of ₹156 crore in the year-ago period and a profit of ₹102 crore in the June quarter.

Eternal expects Blinkit’s store network to cross 3,500 by March 2027, with current plans pointing to around 5,000 stores by March 2028. CFO Akshant Goyal said the company’s cash balance and profits from its food delivery and quick-commerce businesses would allow it to fund the expansion comfortably. It also expects adjusted EBITDA margins to keep improving as the network grows.

Group CEO Albinder Singh Dhindsa said the company was focused on the quality of growth rather than acquiring customers through discounts.

“How we grow matters as much as how fast. Each of our stores has a finite capacity to serve. A customer who shows up only for a deep discount uses the same capacity as one who orders every week across categories. We could add customers much faster by leaning on price, but those customers usually leave when the discount ends,” he said.

Dhindsa said the company was particularly optimistic about expansion beyond major cities. “In metros, we usually compete for a market that already exists. In smaller cities, we are building the market and the supply. That is why we are bullish,” he said.

Zomato food delivery maintains growth momentum

Eternal’s food delivery business also recorded steady growth. NOV rose 21.5% year-on-year to ₹11,445 crore, with the company saying growth acceleration had continued for five consecutive quarters.

Adjusted EBITDA increased 25% to ₹627 crore, although the margin edged down to 5.5% of NOV. Food delivery remains an important contributor to the group’s profitability as Blinkit continues to scale.

Founder Deepinder Goyal said the company remained confident about the business’s long-term growth prospects, despite fluctuations in quarterly performance.

“Our long-term expectation for food delivery has always been 20%+ annual growth, and the last two quarters have brought us back to that range. This view didn’t change last year when growth slowed, and it doesn’t change now that it has picked up,” Goyal said.

District losses persist

The going-out business, District, reported 58% growth in NOV to ₹3,259 crore. Its adjusted EBITDA margin improved to minus 2% from minus 3.1% a year earlier, but the adjusted EBITDA loss remained broadly flat sequentially at ₹64 crore.

Hyperpure, Eternal’s business-to-business supplies arm, also showed an improvement. Revenue grew 22.7% on a like-for-like basis to ₹1,154 crore, while its adjusted EBITDA margin improved to 0.9% from minus 0.5% a year earlier, resulting in a ₹10-crore profit.

Deepinder Goyal also addressed the potential impact of AI agents that shop on behalf of consumers, arguing that such tools would not necessarily displace established commerce platforms.

“The prevailing narrative is simplistic: agents will become the default commerce interface, and platforms that fail to adapt will be disintermediated,” he said. “We continue to believe vertical commerce, at least in some categories, will have an edge over super apps, whether traditional or agentic.”

Eternal shares closed 2.45% lower at ₹312.35 apiece on the NSE on Wednesday, ahead of the company’s Q2 results announcement. The stock has declined nearly 8% over the past year, outperforming the Nifty 50, which has fallen around 12% during the same period.