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Eternal Ltd

| Quarterly Financial Results Q3 FY 2025–26

NEUTRAL SENTIMENT

Report Source

⬤21st Jan 26

Summary : Eternal Limited reports strong revenue growth driven by quick commerce, but faces consolidated profit decline, significant GST dispute, and leadership changes.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total expenses (9M FY26): INR 37,739 crores (vs 14,519 crores 9M FY25).
  2. Standalone Total expenses (9M FY26): INR 7,020 crores (vs 5,740 crores 9M FY25).
  3. Key consolidated expenses (9M FY26): Purchases of stock-in-trade (INR 21,428 crores), Employee benefits (INR 2,609 crores), Delivery and related charges (INR 6,458 crores), Advertisement and sales promotion (INR 2,414 crores).
  4. Consolidated Revenue from operations (9M FY26): INR 37,072 crores (vs 14,410 crores 9M FY25).
  5. Standalone Revenue from operations (9M FY26): INR 7,946 crores (vs 6,425 crores 9M FY25).
  6. Segment-wise consolidated revenue: Quick commerce (INR 24,547 crores), India food ordering (INR 7,422 crores), Hyperpure (INR 4,388 crores), Going Out (INR 696 crores).
  7. GST demands on delivery charges amounting to INR 441 crores (INR 420 + 8 + 13 crores) plus interest and penalties.
  8. Unaudited financial results presented for both standalone and consolidated entities.
  9. Consolidated results include 20 subsidiaries and 1 trust.
  10. Standalone results show profit growth, while consolidated shows profit decline and comprehensive loss.

Corporate Overview

  1. India (primary operations)
  2. Subsidiaries in Middle East, Philippines, Netherlands, Ireland, Malaysia, Turkey
  3. Consolidated profit decline and comprehensive loss despite revenue growth.
  4. Significant GST demand on delivery charges, currently under contestation.
  5. Losses in Hyperpure and Going Out segments.
  6. Subsidiaries in initial/developing stages incurring significant expenses and losses.
  7. Reliance on external expert advice for GST dispute resolution.
  8. Shareholder approval for Deepinder Goyal's Vice Chairman appointment.
  9. Online marketplace platform for food ordering and delivery.
  10. Farm-to-fork supplies (B2B business) for restaurants (Hyperpure).
  11. Quick commerce platform (Blinkit) for direct sales and third-party sellers, including advertisement, warehousing.
  12. Dining-out and entertainment ticketing business, including event production.
  13. Strategic and forward-looking, evidenced by leadership restructuring and acquisitions.
  14. Confident in legal position regarding GST dispute.
  15. End users for food delivery, quick commerce, dining-out, and entertainment ticketing.
  16. Restaurant partners for food ordering and delivery.
  17. Businesses for B2B supplies (Hyperpure).
  18. Third-party sellers on Blinkit platform.
  19. India food ordering and delivery
  20. Hyperpure supplies (B2B business)
  21. Quick commerce
  22. Going out
  23. All other segments (residual)
  24. Strategic investments in subsidiaries (Hyperpure, Entertainment, Blink Commerce, Orbgen, Wasteland) for growth and returns.
  25. Parent committed to provide support to subsidiaries to meet liabilities.

Risk Factors

  1. Significant consolidated profit decline and loss.
  2. Large GST demand on delivery charges.
  3. Losses in key growth-oriented subsidiaries.
  4. Uncertainty from new Labour Codes implementation.

Key Drivers

  1. Quick commerce revenue shows massive growth.
  2. New CEO appointment for operational focus.
  3. Strategic acquisitions expand business offerings.
  4. Parent company committed to support subsidiaries.

Auditor’s Report

  1. Unmodified conclusion on interim consolidated unaudited financial results.
  2. Unmodified conclusion on interim standalone unaudited financial results.
  3. GST demands on delivery charges (Note 6 consolidated, Note 9 standalone).
  4. Reliance on unaudited interim financial information of 20 subsidiaries and 1 trust for consolidated results (deemed not material).
  5. Reliance on unaudited interim financial information of 1 trust for standalone results (deemed not material).

Board Commentary

  1. Deepinder Goyal resigned as Director, Managing Director & Chief Executive Officer, effective February 1, 2026.
  2. Deepinder Goyal recommended for appointment as Vice Chairman & Director, effective upon shareholder approval.
  3. Albinder Singh Dhindsa appointed as Chief Executive Officer and Key Managerial Personnel, effective February 1, 2026.
  4. Uncertainty regarding the ultimate outcome of GST demands on delivery charges.
  5. Receipt of Show Cause Notices and Demand Orders from GST authorities for GST on delivery charges (INR 441 crores).
  6. Company is contesting these orders and believes it has a strong case on merits.
  7. Notification of new Labour Codes by Government of India, with draft rules released.
  8. Acquisition of Orbgen Technologies Private Limited and Wasteland Entertainment Private Limited for INR 2,014 crores.
  9. Strategic long-term investments in subsidiaries (Hyperpure, Entertainment, Blink Commerce, Orbgen, Wasteland) in initial stages.
  10. Parent committed to support subsidiaries financially.

Corporate Governance

  1. Audit Committee reviewed financial results.
  2. Board of Directors approved financial results.

Management Discussion & Analysis

Future Strategy

  1. Focus on expanding quick commerce segment with inventory-led model.
  2. Continued strategic investments in growth-oriented subsidiaries.
  3. Leadership transition to drive future growth and operational efficiency.

Industry Overview

  1. Transitioning from marketplace to combination of marketplace and inventory-led model in quick commerce.

Operational Focus Areas

  1. Integrating acquired Movies Ticketing and Events businesses.
  2. Managing expenses in developing subsidiaries to achieve profitability.
  3. Contesting GST demands on delivery charges.

Performance Drivers

  1. Strong revenue growth, particularly in Quick Commerce segment.
  2. Strategic acquisitions of Movies Ticketing and Events businesses.
  3. Operational expenses for building brand and market share in developing subsidiaries.

Risk Control Measures

  1. Company supported by external expert advice for GST dispute.
  2. Parent committed to provide financial support to loss-making subsidiaries.

Critical Risks

  1. Uncertainty regarding the outcome of significant GST demands.
  2. Profitability challenges in consolidated results and certain segments.
  3. Impact of new Labour Codes (though currently assessed as not material).
Eternal Ltd (ETERNAL) Quarterly Report Analysis & Insights | Dhanarthi