Eternal Q2 Preview: Blinkit to power 137% YoY topline surge, but among villains for up to 71% PAT fall. 5 things to watch – News Air Insight

Eternal, the parent company of food delivery platform Zomato, is expected to post strong revenue growth in the September quarter, though profitability may decline year-on-year due to expansion in its quick commerce business and challenges in the core food delivery segment. Elevated costs, rider incentives, and higher marketing spends are likely to pressure margins.

The company is set to announce its Q2 earnings on Thursday, October 16.

Eternal’s profit could fall up to 71% on a year-on-year basis, while revenue may surge up to 137% according to estimates of four brokerages.

Morgan Stanley remains most bullish on the topline growth among its other peers, viz. BofA, Nuvama Institutional Equities and Bonanza.

Brokerages broadly agree that Eternal’s Q2FY26 results will underline its strong growth trajectory, led by Blinkit and steady food delivery operations. But the profitability narrative remains weak, with elevated costs, rider incentives, and marketing spends weighing on margins. Analysts see solid revenue momentum but limited near-term upside in margins, keeping the outlook cautiously optimistic.

Here’s how these 5 metrics stack against brokerages’ expectations:

1) PAT

Eternal’s profitability is expected to remain under pressure in the quarter gone by, even as topline momentum stayed strong. This reflects continued margin compression from higher delivery and rider costs.– BofA estimates profit after tax (PAT) at Rs 52 crore, up 107% sequentially but down 71% YoY.

— Bonanza expects PAT to decline 30% YoY to Rs 120 crore, highlighting elevated customer incentives and intense competition weighing on earnings.

2) RevenueEternal’s Q2 revenue is expected to see a robust surge, driven by strong traction in its quick commerce arm, Blinkit.

— BofA pegs revenue at Rs 8,480 crore, a 77% YoY growth while an 18% QoQ uptick.

— Morgan Stanley projects revenue at Rs 12,170 crore, up 137.3% YoY and 60.9% QoQ.

— Nuvama estimates a 90% YoY jump while 27% QoQ growth.

— Bonanza sees topline at Rs 8,600 crore, up 80% YoY, led by Blinkit’s rapid growth and improved order frequency in metros and tier-I cities.

3) Food delivery business

BofA expects gross order value (GOV) at Rs 11,340 crore in Q2FY26, up 17% YoY, while Nuvama pegs a growth of 5% QoQ and 17% YoY.

Morgan Stanley expects monthly transacting users (MTU) to increase 1 million QoQ, to 23.9 million, recording a 4.4% QoQ growth as of 2QF26. “We expect both order frequency to show some upturn sequentially during the quarter, while average order values could be steady QoQ, leading to NOV (net order value) of Rs 95.7 bn for 2Q (+6.7% QoQ, +15.6% YoY),” the brokerage said.

The US brokerage assumes the core food delivery adjusted EBITDA margin (as a % of NOV) to remain flat QoQ at 4.9% as in 2QF26 versus 5% in 1QF26.

Overall, these assumptions drive Eternal’s adjusted revenue forecast for the food business (food delivery + hyperpure + others, including going out) to Rs 4,730 crore, down 8.4% QoQ while rising 19.1% YoY as Hyperpure revenues will shift towards Blinkit with an increasing mix of 1P.

4) Blinkit

BofA pegs GOV of quick commerce at Rs 14,590 crore, which is likely to go 24% QoQ.

Morgan Stanley projects a stronger 30.5% QoQ and 143.7% YoY jump in NOV, with revenues rising to Rs 74.4 billion as the mix shifts toward the 1P model. Losses are likely to narrow to Rs 0.7 billion from Rs 1.6 billion in Q1.

Nuvama forecasts Blinkit’s GOV growth of 23% QoQ and 137.1% YoY, calling it the major contributor to Eternal’s revenue jump.

However, Bonanza cautioned that intense competitive activity could delay profitability in the segment despite the rapid expansion.

5) Caveats

Despite the solid revenue momentum, brokerages flagged concerns over the sustainability of such high growth given the rising intensity of competition from players like Zepto and JioMart.

“This suggests that growth continues to be driven by heavy spending and customer acquisition rather than sustainable profitability. Competition in the quick commerce space has intensified with Amazon, Reliance JioMart, and Zepto expanding aggressively, extending the “market capture” phase and delaying margin recovery. Meanwhile, the Food Delivery segment is showing signs of maturity, with slower user additions and weaker discretionary spending,” Abhinav Tiwari, Research Analyst at Bonanza, said.

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Profitability and cost discipline remain key concerns as the outlook stays cautiously positive, depending on how quickly the company can turn its Quick Commerce business profitable, Tiwari said in a note.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)