Zomato Parent Eternal Reports Q1 Profit Miss; Shares Decline 4%

Shares of Eternal Ltd, the parent company of food delivery platform Zomato, declined more than 4 percent on Wednesday after the company announced its April–June quarter results for fiscal year 2027. The stock came under pressure as the company's net profit, despite registering a sharp year-on-year increase, fell significantly short of market expectations. Investors reacted negatively to the earnings outcome, with concerns around profitability and operational performance weighing on sentiment.

Eternal reported a consolidated net profit of Rs 92 crore for the first quarter, marking a rise of more than 260 percent compared with Rs 25 crore in the same quarter of the previous year. However, the profit figure was below the Bloomberg estimate of Rs 300 crore, leading to a decline in the company's share price. Following the earnings announcement, Eternal shares fell as much as 3.86 percent to Rs 275.55 per share during Wednesday's trading session.

The company's revenue stood at Rs 20,211 crore during the quarter, slightly exceeding the market estimate of Rs 20,058 crore. Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at Rs 594 crore, below the estimated Rs 664 crore. The EBITDA margin was reported at 2.9 percent, compared with the expected 3.3 percent, although it improved from 1.6 percent in the year-ago period, reflecting some improvement in operational efficiency.

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Eternal's overall financial performance showed significant year-on-year growth across several key metrics. Revenue increased from Rs 7,167 crore in the same period last year, while EBITDA climbed from Rs 115 crore to Rs 594 crore. The company's quick commerce segment recorded strong growth, with revenue rising to Rs 15,664 crore compared with Rs 2,400 crore a year earlier. The food delivery business also reported a 37 percent increase in revenue to Rs 3,100 crore.

However, some business segments faced challenges during the quarter. The company's Hyperpure business reported a sharp revenue decline of 55 percent, with revenue falling to Rs 1,034 crore. Meanwhile, Blinkit's performance showed a major turnaround, with its earnings before interest and taxes (EBIT) improving to Rs 365 crore from a loss of Rs 42 crore in the previous year. The mixed performance across segments prompted investors to closely evaluate Eternal's growth strategy and future profitability outlook.

The market reaction reflects investor focus on Eternal's ability to convert strong revenue growth into sustainable earnings. While the company's quick commerce and Blinkit businesses continued to expand, the lower-than-expected profit and EBITDA performance raised concerns about margins and cost management. Analysts and investors are expected to track the company's execution across its business segments as it works toward improving profitability while maintaining growth momentum.

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