In a quarter defined by aggressive strategic transformations and market reorientation, Zomato—now officially rebranded as Eternal Limited—has reported its financial results for the first quarter of fiscal year 2026. This is more than just a quarterly update; it’s a watershed moment that’s indicative of a new era for the company.
While the consolidated net profit plummeted by a staggering 90% year-on-year to ₹25 crore, the top-line revenue growth paints a completely different picture. Revenue from operations rose dramatically by 70% year-on-year to ₹7,167 crore—a clear signal that the company is prioritizing high-growth segments even at the cost of profitability in the short term.
At the heart of this strategic realignment lies Blinkit—Zomato’s quick commerce arm—commanding the spotlight as it overtakes the legacy food delivery business in both order value and user growth. Let’s break down what this shift means for the business, its investors, and India’s fast-evolving consumer economy.
Blinkit Becomes the Star Performer
1. Breakneck Revenue Growth
For the first time in its operating history, Blinkit’s quarterly revenue hit ₹2,400 crore, which now exceeds Zomato’s food delivery arm. In percentage terms, Blinkit’s revenue more than doubled year-over-year, clocking an astonishing 127% growth in Net Order Value (NOV).
To put this into perspective: this means Blinkit’s share in the overall business has grown so significantly that it has now redefined Zomato (Eternal’s) core identity—from a food delivery platform to a full-fledged hyperlocal delivery business. The pivot is no longer speculative; it’s happening in real time.
2. User Momentum: Fast and Furious
Another key highlight is Blinkit’s meteoric rise in Monthly Transacting Users (MTUs). The platform’s MTUs rose from 13.7 million in Q4 FY25 to 16.9 million in Q1 FY26—a jump of nearly 4.2 million additional users in just three months.
This unprecedented growth is fueled by increasing demand for quick delivery of essentials across metros, tier-1, and even tier-2 cities. Urban India is becoming habitually dependent on hyper-convenience, and Blinkit seems to be riding that wave better than anyone else.
3. Dark Stores Expansion: Laying the Infrastructure
To fulfill this explosive demand, Blinkit’s operational backend is undergoing rapid-fire expansion. The number of dark stores (fulfillment centers) grew from 639 at the end of Q1 FY25 to 1,504 at the end of Q1 FY26. That’s a 135% increase in store count in one year.
This aggressive expansion is capital-intensive but strategic. These dark stores—small, city-based warehousing units designed for 10–20 minute deliveries—are what enable Blinkit to do what traditional e-commerce can’t: micro-fulfill consumer needs almost instantly.
Management targets include:
- 2,000 dark stores by December 2025
- Visibility up to 3,000 stores in the long run
This aggressive geographical scaling is key to brand stickiness, customer retention, and wallet capture across demographics.
Zomato’s Food Delivery Business: Still Strong But Losing Spotlight
While Blinkit soars, Zomato’s traditional food delivery segment remains solid, albeit overshadowed by the rapid pace of Blinkit’s growth.
1. Steady but Slower Growth
- Food delivery revenue grew 16% YoY, which on its own is a respectful figure.
- However, compared to Blinkit’s 127% order value growth, food delivery now appears mature and stable, not high-growth.
This is not to say that the food delivery business is in decline—it still contributes positively to adjusted EBITDA and continues to grow steadily. However, it’s becoming increasingly clear that Zomato’s growth will now be driven by quick commerce, and food delivery will serve as the profit cushion to support that expansion.
2. High Customer Retention, But Margin Constrained
Food delivery enjoys high customer familiarity and market maturity, but rising delivery costs, significant discounts, and competitive pricing strategies keep margins tight.
The Surprise: 90% Profit Crash—What Happened?
The Numbers:
- Q1 FY26 Net Profit: ₹25 crore
- Q1 FY25 Net Profit: ₹276 crore
➡️ Decline: 90% YoY
This mind-numbing decline caught many by surprise—especially after such robust revenue growth.
What Caused the Decline?
1. Heavy Investments in Blinkit
Blinkit is an inventory-led business in its current form. Unlike marketplace models in e-commerce, Blinkit owns or stocks the inventory in its dark stores, which means higher working capital, storage expenses, spoilage risks, and operational complexities.
This business model, while beneficial for faster fulfillment and quality control, requires enormous cash outlays, especially when you scale from 600 to 1,500+ stores in a short time frame.
2. Rising Competitive Intensity
Players like Swiggy Instamart, ZEPTO, and even Amazon Fresh are making lives harder for Blinkit. In order to maintain its market leadership, Blinkit is:
- Offering aggressive incentives to customers
- Offering better take rates to brands
- Investing in higher-tech dark stores
- Expanding deeper into suburban geographies
All of this adds up to rising operating expenditure (OPEX) without immediate payoff.
3. New Accounting Treatments
CEO Deepinder Goyal briefly acknowledged that a portion of the year-on-year profit drop was due to changes in accounting practices and ESOP-based expenses. These non-operational cost factors diluted the bottom line without necessarily harming core business strength.
Contribution of Hyperpure and Other Verticals
Zomato-owned Hyperpure — their B2B platform that sells ingredients to restaurants — continues to grow but remains a smaller piece of the business pie. Hyperpure contributed an estimated 10–12% to overall revenues but isn’t yet competing for investor attention compared to Blinkit or food delivery.
Zomato Pro and Gold—loyalty-based services—also remain in the background, shoring up occasional user traffic and cross-selling benefits within the ecosystem.
The Shift in Strategic Thinking
Blinkit’s emergence as the leading business vertical is reshaping the company’s internal KPIs and shareholder narrative. Here are the clear markers of a radical pivot by Zomato:
1. From Food Delivery to Hyperlocal Commerce
With Blinkit now exceeding legacy food delivery in both user counts and order values, Eternal Limited is no longer just a restaurant aggregator or a food delivery company. It is now a quick commerce and last-mile logistics innovator.
2. From Profit Seeking to Market Domination
The 90% profit decline is not indicative of poor performance—it’s a price being paid for potential monopoly in India’s highest-growth sector. Eternal is choosing to burn profits today in order to secure defensible long-term advantages in the quick commerce race.
What Does the Market Think? Investor Sentiment & Stock Reaction
Despite the 90% drop in profits, the stock market responded positively to Zomato’s Q1 FY26 results. The share price rose more than 7% post-results, indicating that investors have bought into the Blinkit story.
This reflects long-term confidence in:
- Blinkit’s unit-level metrics approaching break-even
- Food delivery remaining cash-positive
- First-mover advantage in quick commerce infrastructure
Institutional investors appear aligned with CEO Deepinder Goyal’s long-term thesis: that quick commerce is the future of urban consumer behavior, and that Zomato (Eternal) is best positioned to capture it.
Key Challenges & Concerns
While things look bright, here are the key risks in Zomato’s horizon:
1. High-Risk Inventory Strategy
Owning inventory is capital intensive. Spoilage, pilferage, and unsold stock are brutal realities in FMCG logistics. The inventory-led model gives Blinkit speed but not agility.
2. Looming Competition
Big players like Swiggy Instamart, Zepto, Dunzo, and Amazon Fresh are well-funded and hyper-aggressive. Price wars, delivery time races, app loyalty programs—competition is fierce, and sustainability is key.
3. Burn vs. Breakeven
Despite nearing breakeven at store levels, consolidated Blinkit adjusted EBITDA still remains challenged. Investors will need to show patience as Blinkit balances scale with sustainable margins.
What’s Next for Zomato (Eternal) and Blinkit?
According to the management:
- Blinkit growing at 80–100% YoY is expected to continue for the next few quarters
- New dark store penetration will accelerate, especially in Tier 2 and 3 cities
- Focus will remain on optimizing delivery time per kilometer and enhancing shopper experience
- Profitability targets are pushed beyond FY26 to FY27 or even FY28 as expansion continues
Well-funded, deeply embedded in urban habit loops, and ahead in fulfillment infrastructure—Blinkit is betting big on the future of instant gratification.
Conclusion: A High-Stakes Bet on the Future of Commerce
Zomato’s Q1 FY26 results are not just an earnings report—they’re a declaration of intent. With the rebranding to Eternal Limited and Blinkit’s meteoric rise, the company is betting billions on reorienting from online food delivery to an economy of everything-now—delivered in minutes.
While profits suffer temporarily, long-term business moats are being built through infrastructure, user base, and customer loyalty in the high-frequency FMCG space.
The game has shifted. It’s fast-paced, capital-intensive, and fiercely competitive—but if Blinkit succeeds, Zomato stands to reshape commerce in India as we know it.