Whalesbook
📉 The Financial Deep Dive
Eternal Limited, formerly known as Zomato Limited, has unveiled a significant leadership transition alongside its fiscal year 2025 financial results and operational progress. The company is seeking shareholder approval via a postal ballot for key board resolutions, including the re-appointment of four Independent Directors and the elevation of founder Deepinder Goyal to Vice Chairman.
The Numbers:
For FY25, Eternal Limited reported a consolidated revenue (including other income) of ₹21,320 crore, a substantial 64.5% increase from FY24's ₹12,961 crore. Consolidated Profit After Tax (PAT) surged by 50.1% to ₹527 crore in FY25, up from ₹351 crore in FY24. On a standalone basis, the company posted a PAT of ₹1,960 crore on revenue of ₹9,877 crore for FY25.
Operational performance in Q3FY26 has shown marked improvement. The food delivery business achieved an Adjusted EBITDA margin of 5.4% (as a % of Net Order Value - NOV), an increase from 4.6% in FY25. The quick commerce business (Blinkit) reached Adjusted EBITDA break-even for the quarter, a significant turnaround from -1.3% in FY25, with a steady-state target of 5-6%. Hyperpure, the B2B supplies arm, also turned Adjusted EBITDA positive in Q3FY26, aiming for a 4-5% margin long-term.
The Quality:
The company's financial narrative is one of strong top-line growth and improving profitability, particularly evident in margin expansion across key business segments. The significant year-on-year PAT growth highlights operational leverage and strategic execution. However, the considerable difference between standalone PAT (₹1,960 crore) and consolidated PAT (₹527 crore) for FY25 warrants closer investor scrutiny for a complete understanding of inter-company dynamics and consolidation adjustments, though specific drivers are not detailed.
The Grill:
Investor attention is likely to focus on two primary areas. Firstly, the proposed annual remuneration of ₹1,00,00,000 (₹1 crore) for each of the four Independent Directors, which requires shareholder approval. Secondly, the transition of Deepinder Goyal from Group CEO to Vice Chairman. While he will continue to provide strategic oversight, his decision to step down after 18 years to pursue "new, higher-risk ventures outside Eternal's strategic scope" raises questions about potential future conflicts of interest and the strategic direction under new Group CEO Albinder Dhindsa, who will focus on Blinkit.
🚩 Risks & Outlook
Specific Risks:
- Governance Scrutiny: Shareholder approval for the substantial director remuneration is a key event. Potential dissent could signal governance concerns.
- Founder's Role: Managing the dual role of Deepinder Goyal – as Vice Chairman providing strategic guidance for Eternal and pursuing separate high-risk ventures – could pose governance challenges.
- Execution Risk: The success of Albinder Dhindsa's leadership, particularly his focus on Blinkit as the primary growth engine, will be critical.
The Forward View:
Investors will keenly watch the outcome of the postal ballot, expected by March 16, 2026, for board appointments and remuneration approvals. The focus will shift to the operational execution under Albinder Dhindsa, with a particular emphasis on Blinkit achieving its targeted steady-state margins and overall profitability for Eternal Limited. The company's long-term aspiration to become India's most valuable company and serve a billion customers will depend heavily on continued growth and sustained operational efficiency.