Eternal Limited's Q3FY26: Quick Commerce Turns Profitable Amidst Strategic Shifts

Eternal Limited, formerly known as Zomato Limited, has unveiled its Q3 FY26 financial results, showcasing a period of strategic shifts and significant operational milestones. The company reported a consolidated Adjusted Revenue of INR 16,692 crore, marking a robust 190% year-on-year growth. Adjusted EBITDA also saw a substantial increase, reaching INR 364 crore, up 28% year-on-year. This quarter's performance is particularly notable for the quick commerce and Hyperpure businesses achieving Adjusted EBITDA profitability for the first time, signaling a pivotal moment in Eternal's growth trajectory.

The quick commerce segment, primarily driven by Blinkit, demonstrated remarkable progress, turning Adjusted EBITDA positive with a profit of INR 4 crore, a significant improvement from a loss of INR 156 crore in the previous quarter. This turnaround was fueled by robust Net Order Value (NOV) growth of 121% year-on-year, despite impacts from GST changes and seasonality. The food delivery business also sustained its growth momentum, with NOV accelerating to 16.6% year-on-year and an Adjusted EBITDA margin reaching an all-time high of 5.4%. In contrast, the 'Going-out' segment experienced increased losses, reaching INR 121 crore, due to continued investments in category creation, including the launch of the 'District Pass' membership program. The B2B supplies business, Hyperpure, also achieved profitability with an Adjusted EBITDA of INR 1 crore.

The company's strategic initiatives played a crucial role in these results. The shift to an inventory-led model in quick commerce has been margin accretive, with 90% of NOV now on the company's own inventory. This transition is expected to fully accrue its benefits within the next six to nine months. Store expansion in quick commerce continues, with 211 net new stores added, bringing the total to 2,027, although this was slightly short of the 2,100-store guidance due to regulatory restrictions and festive operational constraints. Management remains confident in reaching 3,000 stores by March 2027, with potential for 3,500-4,000 if competitive intensity moderates.

In food delivery, the reduction in minimum order value for free delivery on Gold orders (from INR 199 to INR 99) significantly boosted ordering frequency from budget-conscious customers. The 'District Pass' program, a new membership offering benefits across movies and dining-out, is a key investment in the 'Going-out' segment, aimed at driving customer retention and multi-category engagement. Early impacts are positive, particularly in the movies ticketing business. The 'Others' segment, which includes the quick food delivery service Bistro, continues to see investments in kitchen infrastructure, with 45 kitchens now operational. While currently incurring losses, Bistro is showing early signs of product-market-fit and a potential path to profitability.

Looking ahead, Eternal Limited's management has provided clear guidance. Quick commerce margins are expected to expand to 5-6% of NOV, and investments in capital expenditure and net working capital are projected to yield over 40% Return on Capital Employed (ROCE) over time. Food delivery YoY growth is anticipated to gradually inch towards 20%. The 'District' business is expected to reduce losses sequentially towards breakeven in the next 4-6 quarters, with a long-term target of $3 billion NOV and a 5$1 billion in topline with a 4-5% Adjusted EBITDA margin within three years. The company also addressed the potential impact of the new social security code, stating it is not expected to change long-term margin guidance.

A significant corporate development this quarter was the resignation of Deepinder Goyal as Group CEO, effective February 1, 2026. He will transition to Vice Chairman and Director on the Board, subject to shareholder approval. Albinder Singh Dhindsa, previously CEO of Blinkit, has been appointed as the new Chief Executive Officer and Key Managerial Personnel. This planned succession aims to reinforce institutional strength and allow Deepinder Goyal to pursue higher-risk exploration outside the public company's scope, while ensuring continuity and focused leadership for Eternal. All of Deepinder Goyal's unvested ESOPs will revert to the ESOP pool, ensuring wealth-creation opportunities for future leaders without incremental shareholder dilution.

Eternal Limited's Q3 FY26 results underscore a quarter of strategic execution and significant operational achievements, particularly the profitability of its quick commerce and B2B supply chain segments. Despite challenges like competitive intensity and losses in newer initiatives, the company's disciplined capital allocation and clear long-term vision position it for sustained growth and value creation. The leadership transition further solidifies its institutional framework, ensuring continued focus on powering India's changing lifestyles.