Food delivery and quick commerce giant Eternal Ltd, which owns the well-known brands Zomato and Blinkit, reported a consolidated net profit of Rs. 39 crore for the fourth quarter of FY2025, marking a significant decline from the Rs. 175 crore profit posted in the same period last year. Despite this drop in profits, the company saw a sharp rise in revenue from operations, with a year-on-year increase from Rs. 3,562 crore to Rs. 5,833 crore. However, Eternal also faced rising expenses and a widening loss in its quick commerce business, Blinkit. These mixed financial results come amid a rebranding of the firm and the strategic acquisition of two companies that could reshape its future.
Rebranding and Strategic Acquisitions: A New Identity for Eternal Ltd
In a move aimed at positioning itself for future growth, Zomato Ltd officially rebranded to Eternal Ltd in March 2025. This change in corporate identity signifies a broader strategy of diversification and expansion, as Eternal moves beyond food delivery into other segments, including events, movie ticketing, and B2B services. The rebranding came alongside the acquisition of Orbgen Technologies Pvt Ltd and Wasteland Entertainment Pvt Ltd, both of which add to the company’s portfolio of assets.
Eternal's acquisition of Orbgen Technologies, a digital technology company, and Wasteland Entertainment, which holds a movie ticketing and events business, involved a combination of secondary share purchases and primary infusions, amounting to a total purchase consideration of Rs. 2,014 crore. This acquisition is expected to diversify Eternal's revenue streams, as it looks to capitalize on the growing digital entertainment and event markets.
Despite the change in name, Eternal has retained the Zomato brand for its food delivery operations, including its flagship app. The brand’s continued dominance in the food delivery market remains central to the company's strategy.
Financial Overview: Profit Declines and Revenue Growth
Eternal’s fourth-quarter results, while showing a profit of Rs. 39 crore, also highlight a substantial slowdown in growth. This figure represents a sharp contrast to the Rs. 175 crore profit reported in the same quarter the previous year. The company’s revenue from operations for Q4 stood at Rs. 5,833 crore, up significantly from Rs. 3,562 crore in the year-ago period. This uptick can be attributed to the continued growth of its food delivery business, as well as the expansion into quick commerce and B2B services.
However, the company’s expenses for the quarter ballooned to Rs. 6,104 crore, indicating that while revenue grew, so did the operational and capital costs. This increase in expenses has placed pressure on Eternal’s profit margins, which likely contributed to the decline in net profit.
Blinkit’s Widening Losses and Other Challenges
One of the more concerning developments in Eternal’s quarterly report was the widening of losses in its Blinkit division, which handles quick commerce (instant deliveries of groceries and other essentials). Despite the growing demand for ultra-fast delivery services, Blinkit’s performance has not yet turned profitable, and its losses are a key point of concern for investors. This underperformance is likely tied to high operational costs in the quick commerce space, as well as intense competition from other delivery services.
The quick commerce market, while rapidly expanding, requires significant investment in logistics and infrastructure to maintain profitability. With Blinkit’s losses widening, it remains to be seen how Eternal plans to turn this segment into a sustainable and profitable business.
Revenue Breakdown: A Diversified Portfolio
Eternal's revenue comes from multiple sources, including food delivery, B2B business (via Hyperpure), and quick commerce through Blinkit. The company also operates in the dining out and restaurant segments through District. This diversification is a strategic move to reduce reliance on any single revenue stream and hedge against fluctuations in the highly competitive food delivery and quick commerce sectors.
The B2B side of the business, Hyperpure, which supplies ingredients to restaurants, has grown steadily but remains a smaller part of Eternal’s overall business mix. The company’s District segment, focused on dining out and restaurant-related services, also continues to contribute to the company’s top line, although it faces its own challenges in an increasingly digital-first dining landscape.
Future Outlook: Expanding Beyond Food Delivery
Looking ahead, Eternal’s rebranding and acquisitions signal a clear strategy to broaden its business portfolio. With the acquisition of Orbgen Technologies and Wasteland Entertainment, the company is diversifying into new digital and entertainment verticals. These moves reflect a growing recognition that the future of the tech and commerce sectors is not limited to food delivery.
The move into the entertainment space, through movie ticketing and event management, is a smart one, as it taps into the burgeoning digital entertainment and live events markets. This could offer Eternal a significant growth avenue as it looks to expand its footprint beyond food delivery and into other high-growth segments.
The Stock Market Perspective: Risks and Rewards
From a stock market perspective, Eternal Ltd faces a mixed outlook. While the company’s revenue growth in the fourth quarter is promising, the widening losses in Blinkit and the significant increase in operating expenses are concerning. Additionally, investors will be watching how well Eternal integrates its new acquisitions and whether it can quickly turn Blinkit profitable, a key factor in sustaining growth.
Eternal’s shares, while trading under a new ticker symbol, remain under the scrutiny of investors and analysts who are cautious about the firm’s ability to execute its expansion plans. The company’s focus on technology and innovation, coupled with its strategic acquisitions, could help bolster its position in the long term, but short-term risks remain due to Blinkit’s ongoing struggles and the competitive landscape in both food delivery and quick commerce.
In conclusion, Eternal Ltd is at a crossroads, balancing its historical strengths in food delivery with its ambitious expansion into new markets. The firm’s future success will depend on its ability to diversify its revenue streams, optimize its operations, and turn around underperforming segments like Blinkit. Investors and analysts will be keeping a close eye on how the company navigates these challenges, particularly as the broader market for food delivery and quick commerce faces increasing competition and margin pressure.
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