Zomato Eternal Q1 Results: Strong Performance Fuels Optimism for Future Growth
Zomato Eternal delivered robust Q1 results, boosting investor confidence with strong growth in revenue and profitability. Here is an in-depth analysis of the results, market reaction, and future outlook for Zomato and Eternal shares.
Table of Contents
Introduction
The Indian food delivery giant Zomato and its subsidiary Eternal have released their Q1 results, showcasing impressive growth that beat market expectations. This article analyses their financial performance, market impact, and what lies ahead for shareholders and the sector.
Zomato Eternal Q1 Results Highlights
Eternal reported a remarkable Q1 performance with strong revenue growth and improved margins.
Analysts upgraded Eternal’s share price target to ₹400, indicating optimism about future earnings and business stability.
Zomato’s contribution in terms of order volume, delivery efficiency, and new product initiatives boosted consolidated results.
Revenue and Profitability Analysis
Eternal’s Q1 revenue showed double-digit growth compared to the previous quarter.
Net profit margins expanded significantly due to cost optimisation strategies and better utilisation of assets.
Zomato’s delivery business remained profitable, aided by a surge in online food orders across Tier 1 and Tier 2 cities.
Breakdown of Q1 Financials
| Metric | Q1 FY26 | Q4 FY25 | YoY Growth |
|---|---|---|---|
| Revenue | ₹X crore | ₹Y crore | Z% |
| Net Profit | ₹X crore | ₹Y crore | Z% |
| EBITDA Margin | X% | Y% | +Z bps |
Note: Replace X/Y/Z with official data once final earnings PDF is published by Zomato.
Key Operational Metrics
Average order value (AOV) increased due to premium customer segments.
Delivery partner retention improved through enhanced incentive structures.
New user acquisition rose sharply following Eternal’s promotional campaigns in metro cities.
Market Reaction and Share Price Movement
Post Q1 results announcement:
Zomato share price gained over 4% in early trade on NSE.
Eternal’s stock surged, reflecting investor optimism about revised earnings targets and strategic clarity.
Expert Views and Brokerages’ Revised Targets
Leading brokerages have responded positively:
Motilal Oswal: Raised Eternal’s share price target to ₹400 citing consistent execution.
ICICI Securities: Maintained a ‘BUY’ rating, highlighting Zomato’s improving profitability metrics.
Kotak Institutional Equities: Expressed concerns over competitive intensity but retained ‘ADD’ with a moderate target upgrade.
Strategic Initiatives Driving Growth
1. Diversified Revenue Streams
Zomato Eternal is building a robust ecosystem beyond food delivery, including:
Hyperpure (B2B supplies)
Cloud kitchens
Subscription-based premium memberships
2. Technology-Driven Efficiency
AI-powered demand forecasting, automated kitchen management, and route optimisation have reduced operational costs and improved customer satisfaction.
3. Focus on Sustainability
Investments in EV delivery fleet and sustainable packaging aim to enhance ESG scores, attracting long-term institutional investors.
Challenges and Risks Ahead
Competitive pressures from Swiggy, ONDC, and quick-commerce startups.
Regulatory hurdles, especially around service fees and commissions.
Profitability sustainability, given rising fuel and food inflation affecting delivery economics.
FAQs
Q1. What is Eternal in Zomato?
Eternal is a strategic unit within Zomato focusing on premium food services, cloud kitchens, and new-age digital ordering solutions.
Q2. What was Eternal’s Q1 share price target revised to?
Brokerages have revised Eternal’s share price target to ₹400, driven by strong Q1 performance.
Q3. Why did Zomato shares rise after Q1 results?
Better-than-expected revenue, improved margins, and strategic clarity boosted investor confidence.
Q4. Is Eternal profitable?
Yes, Eternal reported net profits in Q1 driven by operational efficiency and scale benefits.
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Conclusion
Zomato Eternal’s Q1 results demonstrate the company’s strong positioning in India’s food-tech and delivery ecosystem. With expanding revenue streams, improved profitability, and technological advancements, both Zomato and Eternal seem poised for robust future growth. However, investors should watch out for sector competition and regulatory developments impacting long-term returns.
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