Eternal reported a 63% year-on-year (y-o-y) decline in its consolidated profit for the second quarter of FY26, primarily driven by a surge in expenses as the company ramped up investments in its fast-growing quick-commerce business. Profit fell to Rs 65 crore from Rs 176 crore in the year-ago period. However, profitability improved 30% sequentially from Rs 172 crore in the first quarter of FY26.
The company’s revenue from operations grew 2.8 times to Rs 13,590 crore in the second quarter compared with Rs 4,799 crore in the same quarter last year. Management cautioned that this sharp increase primarily reflects a business model shift in quick commerce (Blinkit) to inventory ownership from pure marketplace. On a like-for-like basis, adjusted revenue growth stood at 65% y-o-y. Earnings from the ‘going-out’ segment and other income brought the Eternal Group’s total income to Rs 13,942 crore for the quarter.
The shift to inventory model for Blinkit significantly impacted costs. Overall, the company’s total expenditure increased 2.8 times to Rs 13,813 crore in Q2, up from Rs 4,783 crore in the year-ago period. The cost of materials accounted for 56% of the total expense, growing 5.8 times to Rs 7,742 crore. Delivery and related charges increased 58% to Rs 2,213 crore, while spending on advertising and marketing almost doubled to Rs 806 crore in Q2. On a per-unit basis, the company spent Rs 1.02 to earn every rupee of operating revenue.
Blinkit saw its revenue rise 8.5 times to Rs 9,891 crore. It posted its highest growth in the last 10 quarters with net order value (NOV) jumping 137% y-o-y. The company added 272 net new stores, taking the total count to 1,8161. Looking ahead, Eternal expects to reach 2,100 dark stores by December 2025, revising its earlier guidance of 2,000 dark stores. The company has a visibility to achieve 3,000 stores by March 2027.
However, margin expansion in quick commerce was slower than anticipated due to investments aimed at market share growth, with adjusted Ebitda margin improving to -1.3% from -1.8% in the first quarter of FY26. The core food delivery business contributed 18% of the total operating revenue, growing 23% to Rs 2,485 crore. The segment showed tentative signs of recovery, with NOV growth improving to 14% y-o-y from 13% in the previous quarter.
Managing Director and CEO Deepinder Goyal noted that while the growth rate appears to have bottomed out, “the recovery in growth has been slower than expected”. Despite this, the segment delivered its highest-ever adjusted Ebitda margin of 5.3% of NOV, generating absolute Ebitda of over Rs 500 crore, during the quarter.
Meanwhile, its B2B business Hyperpure’s total revenue saw a y-o-y fall of 31% to Rs 1,023 crore. This was due to scaling down its non-restaurant business under the segment following Blinkit’s shift to an inventory-led model, a segment which is expected to be reduced to zero. The core restaurant business, however, grew at 42% y-o-y, and the company expects it to turn profitable within two quarters.
The going-out business (District) grew 32% y-o-y but posted wider losses of Rs 63 crore as the company continues investing in category creation. During the quarter, the segment launched ‘District stores’ to digitise offline retail and expanded its operations to the UAE.
Eternal announced it would henceforth focus exclusively on NOV as its core growth metric rather than GOV (gross order value), citing increasing divergence between the two. “GOV is a misleading measure of growth in the current environment,” said Akshant Goyal, CFO, Eternal.
Recent Goods and Services Tax (GST) cuts are expected to drive demand for Blinkit from Q3FY26 onwards. However, in Q2FY26 the company saw a negative impact on both growth and margins as customers went into wait and watch mode. “The GST rate cuts have brought down the average GST on Blinkit’s typical basket by approximately 3 percentage points which should drive more demand.
We certainly expect a positive rub-off on demand due to this from Q3FY26 onwards (given the changes came into effect only towards the end of Q2FY26). As far as Q2FY26 is concerned, we saw a negative impact on both growth and margins as customers went into wait and watch mode delaying their purchases across categories including the ones where no GST rate changes were announced,” Goyal added. Conversely, the recently announced 18% GST on food delivery charges, affecting about 25% of orders, has had a slight negative impact on growth, he added.
At a consolidated level, B2C NOV grew 57% y-o-y to Rs 23,164 crore. Excluding other income of Rs 352 crore and finance costs of Rs 86 crore, Eternal posted a negative Ebit of Rs 137 crore for the quarter. On a half-yearly basis, the company’s revenue from operations grew 2.3 times to Rs 20,757 crore in H1FY26 from Rs 9,005 crore in H1FY25.
Eternal shares on NSE closed on Thursday, at Rs 340.50, dropping 3.91% from the day’s opening at Rs 356.