Eternal Limited, the company that owns Zomato and Blinkit, reported a consolidated net profit of ₹65 crore in Q2 FY26 (quarter ended September 2025). This figure marks a decline of 63% compared to the same quarter last year, when the profit was ₹176 crore. At the same time, the company’s revenue surged to ₹13,590 crore, up nearly 183% year-on-year. These numbers point to a complex picture — strong growth in sales but challenges on the profit front.
The sharp rise in revenue is largely driven by Blinkit, especially after its shift to an inventory-led model. This strategy means the company holds stock itself, rather than relying solely on partner stores, thereby enabling faster delivery and more control over fulfillment. This change resulted in a surge in transaction volume and thus helped push group revenue upward in a big way.
But profitability has contracted. Total expenses rose about 189% year-on-year, outpacing revenue growth. The main cost pressures included material costs, inventory handling, logistics, and the high cost of expanding Blinkit’s presence. In effect, more investment was required to back the revenue growth, and it ate into margins.
Blinkit contributed heavily to the revenue growth, thanks to its increased store network and inventory strategy. Management has revealed plans to expand Blinkit’s footprint to over 2,100 stores by December 2025. This aggressive expansion is intended to lock in market share in fast delivery services.
Meanwhile, the company’s B2B supplies unit, Hyperpure, posted weaker performance. Its revenue declined both year-on-year and sequentially. Underperformance in this vertical shows that not all parts of the business are firing together. Because the group is heavily dependent on Blinkit’s success right now, any issues there could disproportionately affect overall profitability.
Several factors explain why profit fell even as revenue soared. First, the inventory-led model carries higher costs of goods sold and additional expenses for storing, managing, and replenishing stock. These costs scale with the volume of business and can erode margins.
Second, the cost of acquiring customers and marketing activity rose significantly. To fuel growth, the company poured money into brand building, promotions, discounts, and expanding operations, all of which increased overheads in the short run.
Third, change in revenue mix has a role. The newer Blinkit model may initially deliver lower profitability per order until its efficiency improves over time. At the same time, Hyperpure’s contraction dragged down margins at a consolidated level.
Investors showed mixed reactions to the results. The surprise was the sharp revenue growth, which lifted sentiment briefly. But weaknesses in profitability tempered enthusiasm. Some brokerages maintained confidence, citing the potential benefits of scale, network effects, and the growing quickcommerce market. Others sounded caution, stressing that future success depends heavily on improving per-unit economics and managing costs.
One common theme in analysis is the uncertainty around whether Blinkit’s growing presence can be turned into steady profits. Execution over the coming quarters will determine whether scale translates into sustainable returns or simply higher losses hidden beneath top-line growth.
To call this a genuine turnaround would be premature. The revenue momentum is undeniable, but profit stability remains elusive. If Blinkit’s units become more efficient, operating costs are contained and Hyperpure recovers, then a sustainable path may emerge.
However, the risk is clear: growth without proper control may turn into overextension. The inventory model gives more control and faster delivery, but only if density, store productivity, and order economics align. Otherwise it can lean toward a capital-intensive burden.
In addition, competition in quickcommerce and food delivery is fierce, and macroeconomic pressures can squeeze discretionary spending, further tightening margins.
Future quarters will be closely watched for signs of margin improvement. Key metrics include departmental profitability within Blinkit, inventory turnover, average order value, marketing spend as percentage of revenue, and retention rates. Stabilization or improvement in Hyperpure’s performance would also be a welcome indicator.
Management’s guidance and capital allocation choices will matter heavily. If investments continue without visibility into positive returns, confidence may waver. On the other hand, if the company demonstrates disciplined spending and begins converting growth into cash flows, it would mark progress toward a real turnaround.
In summary, while Eternal’s recent results show impressive sales growth, the profit contraction underlines that the turnaround is not yet fully in place. The coming quarters must reveal whether the strong top line translates into sustainable, durable earnings.