Eternal Ltd (Zomato) Wins in Budget 2026: IT Safe Harbor & Infra Push

Introduction: A Favorable Budget for Tech Platforms

The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, has outlined a clear roadmap focusing on fiscal consolidation, infrastructure development, and simplification of the tax regime. For technology-driven companies like Eternal Ltd., the parent company of Zomato, Blinkit, and Hyperpure, the budget brings a host of positive measures. The key announcements center on significant direct tax reforms for the Information Technology (IT) sector, continued support for the MSME ecosystem, and a sustained push for urban infrastructure, all of which create strong tailwinds for Eternal's diverse business segments.

Major Relief for IT Services Under New Tax Rules

The most significant announcement for Eternal Ltd. comes from the direct tax proposals aimed at the IT sector. The budget proposes to club all interconnected services—including software development, IT-enabled services (ITES), and knowledge process outsourcing (KPO)—under a single category of 'Information Technology Services'.

This move is accompanied by two major reliefs:

1. A Common Safe Harbor Margin: A uniform safe harbor margin of 15.5% will be applicable to all these services, simplifying transfer pricing compliance.
2. Enhanced Threshold: The threshold for availing this safe harbor has been substantially increased from ₹300 crore to ₹2,000 crore. For a company of Eternal's scale, this is a game-changer. It significantly reduces the compliance burden, minimizes the risk of tax litigation, and provides much-needed certainty in tax planning.

Furthermore, the process for availing safe harbor will be automated and rule-driven, with a validity of five years, reinforcing the government's commitment to improving the ease of doing business.

How Simplified Corporate Tax Benefits Eternal

Budget 2026 continues to encourage companies to transition to the new, simplified corporate tax regime, which offers a lower tax rate in exchange for forgoing certain exemptions. A key proposal is the rationalization of the Minimum Alternate Tax (MAT). The MAT rate is being reduced from 15% to 14% and will now be treated as a final tax, ending further credit accumulation.

Crucially, the budget allows companies shifting to the new regime to set off their brought-forward MAT credit against their tax liability, up to one-fourth of the liability per year. For a company like Eternal, which has been in a high-investment phase, this provision can unlock valuable tax credits, directly improving its bottom line and cash flow.

Indirect Boost Through MSME and Restaurant Partner Support

Eternal's success is deeply intertwined with the health of its vast network of restaurant and merchant partners, most of which fall under the Micro, Small, and Medium Enterprises (MSME) category. The budget's focus on creating 'Champion MSMEs' provides an indirect but powerful boost to Eternal's ecosystem.

Proposals like a dedicated ₹10,000 crore SME growth fund for equity support and enhanced liquidity through the TReDS platform will help these small businesses scale and operate more efficiently. A financially robust and stable partner base is essential for the long-term health of Eternal's food delivery (Zomato) and B2B supply (Hyperpure) businesses.

Infrastructure Push to Power Long-Term Growth

The government's unwavering focus on infrastructure is another long-term positive. The budget increases the capital expenditure outlay to a substantial ₹12.2 lakh crore. The specific emphasis on developing infrastructure in Tier 2 and Tier 3 cities through initiatives like 'City Economic Regions' aligns perfectly with the expansion strategies of companies like Eternal.

Better roads, improved logistics, and enhanced digital connectivity in these emerging urban centers are critical for the operational efficiency of both food delivery and quick commerce. For Blinkit, this means easier setup and management of dark stores, while for Zomato, it translates to faster delivery times and lower operational costs, making these markets more viable for growth.

Market and Investor Sentiment

Overall, the announcements in Union Budget 2026 are likely to be received positively by the market and investors. The direct tax proposals provide immediate, tangible benefits by improving tax certainty and reducing compliance costs, which can positively impact profitability. The continued investment in infrastructure and support for the MSME sector are strong signals of a stable policy environment that fosters long-term growth. These measures collectively strengthen Eternal's financial outlook and support its narrative of sustainable expansion and operational leverage.

Conclusion: A Budget for Growth and Stability

Union Budget 2026 provides a balanced mix of immediate relief and long-term growth enablers for Eternal Ltd. The simplification of tax laws for the IT sector directly addresses a key operational challenge, while the broader economic policies create a conducive environment for its core businesses to thrive. Eternal is now better positioned to leverage these policy tailwinds to enhance profitability, streamline operations, and accelerate its expansion into India's emerging cities.