Whalesbook
Q3 FY26 Financial Performance and Key Milestones
Eternal Limited reported a significant upswing in its financial performance for the third quarter of fiscal year 2026 (Q3 FY26), which concluded on December 31, 2025. The company announced a consolidated net profit of ₹102 crore, marking a substantial 73% year-on-year increase from the ₹59 crore reported in the same quarter of the previous fiscal year. Revenue from operations surged by 202% year-on-year to ₹16,315 crore, driven primarily by the inventory-led quick commerce business, Blinkit.
A pivotal development highlighted in the results was Blinkit's achievement of adjusted EBITDA profitability for the first time on a quarterly basis, reporting a profit of ₹4 crore. This marks a considerable turnaround from the losses of ₹100-200 crore experienced in previous quarters. The food delivery segment also contributed positively, achieving a record-high adjusted EBITDA margin of 5.4%. The company's overall adjusted EBITDA for the quarter stood at ₹531 crore.
Leadership Transition and Strategic Reorientation
Parallel to the financial results, Eternal announced a significant leadership transition. Founder Deepinder Goyal will step down from his role as Group Chief Executive Officer (CEO) effective February 1, 2026, to assume the position of Vice Chairman. Albinder Dhindsa, currently the head of Blinkit, will take charge as the new Group CEO. This change is expected to bring a renewed focus on scaling Blinkit as a primary growth engine for the company, supported by the strategic shift towards an inventory-led model which now accounts for approximately 90% of Blinkit's net order value.
Analyst Sentiment Remains Constructive
Following the Q3 FY26 results and the leadership announcement, several brokerage houses have reiterated a positive outlook on Eternal's stock.
- Jefferies maintained a 'Buy' rating with a price target of ₹480, suggesting an upside potential of approximately 78%, citing Blinkit's positive EBITDA amidst peak competition and improved margins from the first-party model.
- JM Financial reiterated its 'Buy' rating with a target of ₹400, implying an upside of over 41%, acknowledging Blinkit's EBITDA breakeven occurring ahead of expectations.
- Nomura kept its 'Buy' rating and raised its target price to ₹380, highlighting improved visibility on profitable growth at Blinkit and the nearly complete transition to an inventory-led model.
- UBS retained a 'Buy' rating with a target of ₹375, noting Blinkit's breakeven and continued growth in the food delivery business.
- HSBC maintained a 'Buy' recommendation with a target of ₹350, pointing to "multiple positive surprises" in the quarter, including rapid EBITDA breakeven for Blinkit and accelerating food delivery growth.
While most analysts are optimistic, some, like UBS, flag competitive intensity as a key factor to monitor.
Financial Standing and Sector Dynamics
Eternal concluded the quarter with a robust cash balance of ₹17,820 crore, a slight decrease from ₹18,314 crore in the prior quarter, attributed to planned investments in store expansion and working capital for Blinkit. The company's market capitalization stands at approximately ₹2.73 lakh crore, with a TTM P/E ratio of around 1491.58. The quick commerce sector continues to be highly competitive, with companies like Swiggy and Zepto also actively raising capital and expanding their operations. The shift towards an inventory-led model and focus on unit economics are key themes shaping the sector's evolution. A GST demand order, including interest and penalty totaling ₹3.7 crore, was also noted for the financial year April 2019 to March 2020, which the company plans to appeal.