Zomato Parent Q1: Revenue Soars 70%, Shares Jump 15%

Zomato Parent Q1: Revenue Soars 70%, Shares Jump 15%

Zomato parent reports 70% YoY revenue growth, huge Blinkit gains—shares rally ~15% to ₹312. Profit dips 90%. Get broker views now!

Zomato's Q1 FY26 Report: Revenue Skyrockets, Blinkit Shines!

In a highly anticipated financial disclosure, Eternal (Zomato's parent company) has announced its first-quarter results for the fiscal year 2025-26 (Q1 FY26), revealing a robust 70% year-on-year (YoY) surge in consolidated revenue. This impressive top-line growth has sent Zomato's shares soaring, registering an approximate 15% jump to reach ₹312 per share in early trading. The market's enthusiastic response largely stems from the stellar performance of its quick commerce arm, Blinkit, which continues to be a significant growth driver for the company.

While the revenue figures paint a strong picture of expansion and market penetration, the company's consolidated net profit saw a notable dip of approximately 90% during the quarter. This mixed bag of results has prompted varied reactions from market analysts and brokerage firms, who are now recalibrating their outlooks and ratings for the food delivery and quick commerce giant. Let's delve deeper into the numbers, understand the key growth engines, and explore what brokers are saying about Zomato's future trajectory.

Q1 FY26 Snapshot: Revenue Growth vs. Profit Dip

Zomato's Q1 FY26 performance showcases a clear strategy focused on aggressive revenue expansion, particularly through its quick commerce segment.

• Consolidated Revenue: The company reported a remarkable 70% YoY increase in consolidated revenue, underscoring strong demand across its platforms. This growth is a key indicator of Zomato's expanding user base and increased transaction volumes.
• Consolidated Net Profit: Despite the revenue surge, Zomato's consolidated net profit for Q1 FY26 witnessed a significant decline of approximately 90%. This dip can be attributed to increased investments in growth initiatives, particularly in scaling up the quick commerce business, and higher operational expenses.
• Gross Order Value (GOV): While specific GOV figures might be detailed in the full report, the revenue growth suggests a healthy increase in the total value of orders processed across both food delivery and quick commerce.

The company's approach appears to prioritize market share and long-term growth over immediate profitability, a common strategy for high-growth tech companies.

Blinkit's Explosive Growth: Driving Zomato's Top Line

The standout performer in Zomato's Q1 FY26 results is undoubtedly Blinkit, its quick commerce venture. Blinkit's contribution has been instrumental in the overall revenue surge, demonstrating the immense potential of the instant delivery market.

• Significant Contribution: Blinkit's revenue growth has outpaced that of Zomato's core food delivery business, becoming a major contributor to the consolidated top line. This indicates successful market penetration and increasing consumer adoption of quick commerce services.
• Expansion and Penetration: The growth suggests that Blinkit is successfully expanding its dark store network and reaching a wider customer base, especially in urban and semi-urban areas.
• Future Growth Driver: Analysts widely view Blinkit as a critical future growth engine for Zomato, with the potential to unlock new revenue streams and diversify the company's business model beyond just food delivery. The quick commerce segment is still nascent in India but is experiencing rapid expansion.

The company's continued investment in Blinkit, despite its impact on short-term profitability, highlights its strategic importance in Zomato's long-term vision.

Market Cheers: Zomato Shares Jump ~15% to ₹312

The immediate reaction from the stock market to Zomato's Q1 FY26 results was overwhelmingly positive. Zomato's shares witnessed a significant rally, jumping approximately 15% to trade around ₹312 per share.

• Investor Confidence: The strong revenue growth, particularly from Blinkit, instilled confidence among investors, who are seemingly willing to overlook the short-term profit dip in favor of long-term growth prospects.
• Quick Commerce Potential: The market is clearly bullish on the quick commerce segment's potential and Zomato's leading position in it. This segment is seen as a high-growth area that could significantly boost Zomato's overall valuation.
• Analyst Upgrades: The positive results may lead to potential upgrades in target prices and ratings from various brokerage firms, further fueling investor interest.

The stock's performance reflects the market's focus on top-line expansion and the strategic value of Zomato's diversified business model.

Understanding the 90% Profit Decline: A Strategic Investment?

While the robust revenue growth is commendable, the sharp 90% decline in consolidated net profit warrants a closer look. This is not uncommon for companies in hyper-growth phases, especially in competitive digital markets.

• Investment in Growth: A significant portion of the profit dip is likely due to increased spending on expanding Blinkit's operations, including setting up new dark stores, hiring delivery personnel, and marketing efforts to acquire new customers.
• Operational Expenses: As the scale of operations grows, so do associated costs like delivery executive incentives, technology infrastructure, and administrative expenses.
• Customer Acquisition Costs: In a competitive landscape, companies often spend heavily on promotions and discounts to attract and retain customers, impacting profitability in the short term.

Analysts will be keenly watching if these investments translate into sustained market leadership and eventual profitability in the coming quarters. The market seems to be giving Zomato the benefit of doubt, viewing these as necessary expenditures for future dominance.

What Are the Brokers Saying? Analyst Ratings and Outlook

Following the Q1 FY26 results, several brokerage firms have updated their views on Zomato:

• Positive Outlook on Quick Commerce: Most brokers are highly optimistic about Blinkit's growth trajectory, seeing it as a key differentiator for Zomato.
• Long-Term Growth Potential: Many firms maintain a "Buy" or "Outperform" rating, emphasizing Zomato's strong market position in both food delivery and quick commerce, and its potential for long-term value creation.
• Focus on Unit Economics: While acknowledging the profit dip, analysts will be closely monitoring improvements in unit economics across both segments in subsequent quarters.
• Target Price Revisions: The strong revenue performance could lead to upward revisions in target prices as analysts factor in the accelerated growth.

The consensus among analysts appears to be that Zomato is on a strong growth path, even if it comes at the cost of short-term profitability. The focus remains on scalability and market leadership in the burgeoning quick commerce sector.

Looking Ahead: Zomato's Path Forward

Zomato's Q1 FY26 results reinforce its position as a dominant player in India's digital consumer services landscape. The company's strategy of aggressive expansion in quick commerce, while impacting immediate profitability, seems to be well-received by the market, which is valuing future growth potential.

Investors will be watching for continued revenue acceleration, especially from Blinkit, and signs of improving unit economics and a clearer path to sustainable profitability in the upcoming quarters. Zomato's ability to balance rapid growth with financial discipline will be key to its continued success and stock performance.

Zomato's Growth Story Continues to Unfold!

Zomato's Q1 FY26 results showcase impressive revenue growth driven significantly by its quick commerce arm, Blinkit. While profits saw a temporary dip due to strategic investments, the market has reacted positively, signaling confidence in the company's long-term vision.

Keep an eye on this dynamic player as it navigates the evolving landscape of food delivery and quick commerce in India!