Investors sold off shares of Eternal, the parent company of Zomato, during the last hour of Thursday’s trade, October 16, following the release of the company’s financial performance for the September quarter, resulting in a 2% drop in value to ₹347 apiece. At one point, the shares had fallen 8% but recovered by the closing bell.
Despite strong topline performance, a sharp drop in net profit, weighed down by rising costs, along with a muted growth outlook from management, prompted investors to turn cautious, leading to sharp volatility in the stock.
Eternal Q2 performance
The company’s food delivery business, which had been growing slowly in recent quarters, improved marginally in the September quarter. However, this growth fell short of the company’s earlier forecast, and it expects only a slow uptick in the segment’s growth rate in the near term.
Continued expansion in the dark store network led to the quick commerce arm, Blinkit, reporting an EBITDA loss of ₹156 crore in Q2 FY26, higher than the ₹8 crore loss incurred during the same period last year and above analysts’ expectations from ICICI Securities and Elara Capital, which had projected losses of ₹100 crore.
On a sequential basis, however, the adjusted EBITDA loss was lower than the ₹162 crore recorded in Q1 FY26.
Adjusted EBITDA margin stood at 1.3%, coming in below estimates, as ICICI Securities and Motilal Oswal had expected Blinkit’s adjusted EBITDA margin loss to be between 0.7% and 0.6%.
“This was largely driven by our investments to drive higher growth and net order value market share opportunistically,” the company added, noting a lower but still strong competitive intensity.
The company expects its store network to reach 2,100 stores by December 2025, up from the earlier guidance of 2,000 stores.
On the bottom line, the company reported ₹65 crore for Q2 FY26, marking a 63% year-on-year drop”>a net profit of ₹65 crore for Q2 FY26, marking a 63% year-on-year drop from the ₹176 crore net profit reported in Q2 FY25.
Eternal share price expected to remain volatile on Friday
According to market experts, the shares are likely to remain volatile in Friday’s trading session, as the reaction to the results may continue. Brokerages are also expected to release their views on the company’s September quarter performance, and it remains to be seen whether they maintain their positive stance or revise their ratings for the stock, given the company’s miss in the QC segment.
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