Whalesbook
Eternal Limited, formerly known as Zomato, has reported its Q4 FY26 financial results, showcasing significant growth. The company announced a consolidated Adjusted Revenue of ₹17,680 crore, a substantial 186% increase year-on-year. Consolidated Adjusted EBITDA also rose sharply by 160% to ₹429 crore. This strong performance was bolstered by a 54% year-on-year increase in Consolidated Net Order Value (B2C) to ₹26,880 crore, largely driven by the quick commerce segment's strategic shift to a principal (1P) model.
This transition means revenue now includes the full value of goods sold in the quick commerce segment, contributing significantly to the accelerated top-line growth. The company's key business segments performed well: Quick Commerce NOV grew 95% year-on-year to ₹14,386 crore, Food Delivery NOV increased by 19% year-on-year to ₹9,757 crore, and the Going-out segment saw a 47% year-on-year growth in NOV to ₹2,736 crore.
The substantial increase in revenue and EBITDA highlights Eternal's effective strategy execution. The company's strong operational performance positions it to achieve its ambitious future targets. A healthy closing cash balance of ₹17,972 crore provides a solid foundation for continued investment and expansion.
Eternal Limited is actively pursuing market expansion, aiming to extend its reach to 1,000 cities by 2025. This strategy focuses on increasing presence and order frequency, particularly in Tier-2 and Tier-3 cities across India. Shareholders can expect continued revenue momentum from the successful integration of the 1P model in quick commerce. Profitability is projected to improve as the company works towards its Adjusted EBITDA target. Initiatives such as lowering free delivery thresholds in food delivery are designed to attract a larger, more price-conscious customer base.
However, the company faces potential financial implications from ongoing Goods and Services Tax (GST) issues. Eternal Limited has received show cause notices and orders from GST authorities concerning GST on delivery charges. While the company is contesting these demands, believing it has a strong case, the ultimate outcome remains uncertain. Previously, Zomato received a significant demand of ₹803.4 crore, including penalty and interest, for the period October 2019 to March 2022, against which the company is pursuing appeals.
In the competitive landscape, Eternal Ltd is a dominant player in India's food delivery market with over 60% share, competing primarily with Swiggy, which holds approximately 40%. Other food service players, like Jubilant FoodWorks, operate in related segments. In Q2 FY26, Eternal's Price-to-Sales (P/S) ratio was 9.9x, compared to Swiggy's 6.1x, indicating a market valuation premium for Eternal's growth prospects, especially Blinkit's potential.
Investors will be tracking Eternal's progress towards its goal of doubling annual Net Order Value to $20 billion within two years and achieving $1 billion in Adjusted EBITDA by FY29. The sustained growth trajectory of the quick commerce segment relative to food delivery, and the impact of strategies to attract budget-conscious customers, will also be key indicators.