Eternal, the parent company of Zomato and Blinkit, said the recent changes in the Goods & Service Tax (GST) rate structure had a negative impact on the delivery charge collected from customers ordering food. It may be noted that now under Section 9(5) of the CGST Act, e-commerce operators such as Zomato or Swiggy are responsible for collecting and paying GST, rather than the restaurant.
Akshant Goyal, the chief financial officer (CFO), explained that an 18% GST is now applicable on the delivery charge paid by customers ordering food, which impacts about 25% of their orders where delivery is not free.
“This has had a slight negative impact on the growth of the business as we have passed on this tax burden to customers. There was no impact on delivery charge paid by customers on Blinkit -- it already includes 18% GST given the model of engagement with delivery partners there is different as compared to food delivery and nothing changes on that front for us,” said Goyal in an exchange filing as Eternal announced its Q2FY26 results.
Asked about the recent reforms of the tax structure, Goyal said that the GST rate cuts have brought down the average GST on Blinkit’s typical basket by 3 percentage points which should drive more demand. The company expects a positive rub-off on demand due to this from Q3FY26 onwards given that the changes came into effect only towards the end of Q2FY26.
“As far as Q2FY26 is concerned, we saw a negative impact on both growth and margins as customers went into wait and watch mode delaying their purchases across categories including the ones where no GST rate changes were announced,” added Goyal.
Eternal reported a 63% year-on-year (YoY) fall in quarterly profit after tax (PAT) at Rs 65 crore in the second quarter of financial year 2025-26 (Q2FY26), down from Rs 176 crore in the same period a year ago. During the quarter under review, Eternal's revenue from operations stood at Rs 13,590 crore, up from Rs 4,799 crore in the year-ago period. Eternal’s total expense shot up to Rs 13,813 crore in Q2FY26 from Rs 4,783 crore in the year-ago quarter.
The company stated that the results are not comparable with the corresponding quarter last year due to the acquisition of Orbgen Technologies Pvt Ltd and Wasteland Entertainment Pvt Ltd, which holds the ‘movie ticketing’ and ‘events’ businesses, respectively, from One97 Communications Ltd (Paytm’s parent firm).
The company’s net order value (NOV) for food delivery business increased 14% Y-o-Y to 9,423 crore in Q2FY26 while for Blinkit, NOV stood at Rs 11,679 crore in Q2FY26, up 137% Y-o-Y.
Deepinder Goyal, founder and chief executive officer (CEO) of Eternal, said, "In line with our expectation (as mentioned in the last letter), NOV growth rate (Y-o-Y) did go up in Q2FY26 after declining consistently for the last five quarters. Having said that, the recovery in growth has been slower than expected, and we only expect a slow uptick in growth rate in the near term."
He added, “Food delivery is facing headwinds, including soft discretionary consumption, the impact of quick commerce (qcom) growth, and increasingly volatile weather, which continue to weigh on near-term growth.”
