ETERNAL Revenue Nearly Doubled in a Quarter — Was Any of That Growth Real?

The Marketplace Model Disappears: How an Accounting Switch Nearly Doubled Revenue

This is Eternal Limited's (formerly Zomato Limited) Q2 FY26 results - the quarter ended September 30, 2025, board-approved October 16, 2025 - the twentieth quarter as a public company covered in this series. Unlike the prior quarter's post, which had only an income statement and segment note, this quarter's filing restores a full consolidated and standalone balance sheet and a half-year cash-flow statement, alongside Deloitte Haskins & Sells' limited review (not an audit) of both statements. No presentation deck or transcript was filed.

Consolidated revenue from operations grew 89.6% QoQ to Rs. 13,590 crore, up 183.2% YoY from Rs. 4,799 crore a year earlier - by far the sharpest jump this series has ever recorded, dwarfing even last quarter's already-accelerating 22.9% QoQ growth. Read at face value, this looks like an extraordinary demand surge. It isn't, or at least not mostly. Quick Commerce's segment revenue grew 312.1% QoQ (Rs. 2,400 crore to Rs. 9,891 crore) in the same quarter Hyperpure's B2B segment revenue fell 55.4% QoQ (Rs. 2,295 crore to Rs. 1,023 crore) - a near-mirror-image swing that's the direct, now fully visible consequence of the marketplace-to-inventory-led transition flagged only qualitatively last quarter. Standalone (parent-only) revenue, which doesn't consolidate Blinkit's or Hyperpure's own books, grew a far more ordinary 9.8% QoQ to Rs. 2,650 crore - the cleanest evidence that the consolidated headline number is being inflated by how a transaction gets booked, not by how many more of them are happening (see Beyond the Usual).

Net income did genuinely recover this quarter. Profit for the period rose 160.0% QoQ to Rs. 65 crore, from Rs. 25 crore - the first sequential increase since net income peaked at Rs. 253 crore in Q1 FY25, ending the five-straight-quarter decline this series tracked through the last post. Profit before tax rose a more modest 46.6% QoQ (Rs. 88 crore to Rs. 129 crore), and the consolidated effective tax rate eased to 49.6% (Rs. 64 crore tax on Rs. 129 crore PBT), down from last quarter's 71.6% but still nearly double the standalone parent's own 10.4% rate (Rs. 80 crore tax on Rs. 771 crore standalone PBT). The gap between standalone and consolidated PBT - loss-making subsidiaries eroding the parent's own profit - actually widened slightly, from Rs. 593 crore last quarter to Rs. 642 crore this quarter; the tax rate improved mechanically because consolidated PBT grew faster than the tax bill did, not because the underlying subsidiary-loss dynamic eased (see Beyond the Usual).

The Prescription

Disclose the reclassification's rupee size the moment it's this large, not after a reader has to reconstruct it from segment tables. Quick Commerce's revenue grew by Rs. 7,491 crore QoQ while Hyperpure's fell by Rs. 1,272 crore - a swing more than five times the size of the entire India food-delivery segment's quarterly revenue - and the company still hasn't published a single number quantifying how much of that is the marketplace-to-inventory-led accounting switch versus organic Blinkit growth. A reader can now infer the rough scale from the balance sheet (inventories jumped from Rs. 176 crore to Rs. 1,502 crore since March, purchases of stock-in-trade rose from Rs. 2,557 crore to Rs. 8,795 crore QoQ), but inference isn't disclosure, and a company that changes how it recognizes revenue in its fastest-growing, most-watched segment owes readers the actual split.

Stop letting Blinkit's dark-store and inventory build outrun free cash flow without saying so plainly. Half-year operating cash flow of just Rs. 38 crore against Rs. 788 crore of capex produced roughly negative Rs. 750 crore of free cash flow for H1 FY26, a sharp reversal from H1 FY25's roughly positive Rs. 60 crore - and Blinkit's cumulative losses since acquisition, at Rs. 3,200 crore, are now above 90% of the goodwill booked for the deal with still no impairment test flagging a concern. Growth funded by burning cash faster than the business generates it is a normal stage-of-life story for a quick-commerce build-out, but it stops being a footnote once free cash flow moves this far into negative territory in a single half-year - it deserves its own line in how management frames the quarter, not silence (see Beyond the Usual).

Key Financial Metrics

Q2 FY26 (quarter ended September 30, 2025, unaudited, limited review) vs Q1 FY26 (quarter ended June 30, 2025) and Q2 FY25 (quarter ended September 30, 2024) - consolidated, reported in INR crore and USD (converted at approximately Rs. 88.84/$1, the September 2025 month-end rate, applied across all periods shown for consistency)

Metric	Q2 FY26	Q1 FY26	QoQ	Q2 FY25	YoY
Revenue from Operations	⚠️ Rs. 13,590 crore ($1,529.7M)	Rs. 7,167 crore ($806.8M)	⚠️ +89.6% (mostly accounting, see above)	Rs. 4,799 crore ($540.2M)	⚠️ +183.2%
Operating Income (Profit before tax)	✅ Rs. 129 crore ($14.5M)	Rs. 88 crore ($9.9M)	✅ +46.6%	Rs. 237 crore ($26.7M)	⚠️ -45.6%
Net Income (Profit for the period)	✅ Rs. 65 crore ($7.3M)	Rs. 25 crore ($2.8M)	✅ +160.0%	Rs. 176 crore ($19.8M)	⚠️ -63.1%
Adjusted EBITDA (management non-GAAP)	Not disclosed - no presentation deck filed	Not disclosed	n/a	Not disclosed	n/a
Free Cash Flow	⚠️ ~Rs. (750) crore ($(84.4)M), H1 FY26 (operating cash flow Rs. 38cr less capex Rs. 788cr)	Not derivable - no cash-flow statement filed	n/a	~Rs. 60 crore, H1 FY25 (derived)	⚠️ swung negative
Total Cash and Cash Equivalents	⚠️ Rs. 431 crore ($48.5M)	Not available	n/a	Not directly comparable (H1-only disclosure point)	n/a

Total segment result (the sum of all five segments before unallocated corporate costs, other income, finance costs, and depreciation) was ✅ Rs. 413 crore, up 27.1% QoQ from Rs. 325 crore, and up a modest 2.0% YoY from Rs. 405 crore (see Segment Results) - a genuine operating improvement, though far more modest than the headline revenue growth would suggest.

Trailing-eight-quarter view (Q3 FY24 through Q2 FY26, INR crore): revenue Rs. 3,288 → Rs. 3,562 → Rs. 4,206 → Rs. 4,799 → Rs. 5,405 → Rs. 5,833 → Rs. 7,167 → Rs. 13,590 (unbroken growth, now accelerating so sharply that the series' usual quarter-over-quarter comparison breaks down as a like-for-like measure); net income Rs. 138 → Rs. 175 → Rs. 253 → Rs. 176 → Rs. 59 → Rs. 39 → Rs. 25 → Rs. 65 (five straight declines from the Q1 FY25 peak, now reversed for the first time). This is the first trailing-eight-quarter window in the series where net income rose sequentially - worth genuine credit - but it's also the window where revenue growth has become least comparable across periods, since the last two quarters carry a materially different accounting basis for Quick Commerce than everything before them.

Standalone (parent-only) figures put the reclassification in sharp relief: standalone revenue grew just 9.8% QoQ to Rs. 2,650 crore (vs consolidated's 89.6%), standalone PBT rose 13.2% QoQ to Rs. 771 crore, and standalone net income rose 14.8% QoQ to Rs. 691 crore - a normal, unremarkable quarter at the entity level that doesn't consolidate Blinkit's inventory-led sales.

Key Operational Metrics

No presentation deck or transcript was filed alongside this quarter's results, so GOV^», Blinkit store count, monthly transacting customers, restaurant-partner counts, and Contribution margin are all not available this quarter - the same gap flagged repeatedly through the last several quarters whenever no deck accompanies the regulatory filing. The one operational proxy available this quarter is the balance sheet itself: consolidated inventories rose from Rs. 176 crore (March 31, 2025) to Rs. 1,502 crore (September 30, 2025), and purchases of stock-in-trade rose from Rs. 2,557 crore to Rs. 8,795 crore QoQ - both consistent with Blinkit now holding and selling inventory directly rather than purely intermediating third-party sellers.

Segment Results

Eternal reports five business-line segments - India food ordering and delivery, Hyperpure (B2B restaurant supply), Quick commerce (Blinkit), Going-out (dining-out, Zomato Live, and movie/event ticketing via the OTPL/WEPL acquisitions), and All other segments (residual). Segment result is operating profit/loss before unallocated corporate costs, share-based payment expense, finance costs, depreciation/amortisation, and other income.

Segment	Revenue (Q2 FY26)	QoQ	Segment Result (Q2 FY26)	Q1 FY26 Result	Q2 FY25 Result
India food ordering and delivery	✅ Rs. 2,485 crore ($279.7M)	✅ +9.9%	✅ Rs. 518 crore (profit)	Rs. 465 crore	Rs. 349 crore
Hyperpure	⚠️ Rs. 1,023 crore ($115.2M)	⚠️ -55.4%	✅ Rs. 1 crore (profit)	Rs. (5) crore	Rs. (5) crore
Quick commerce (Blinkit)	✅ Rs. 9,891 crore ($1,113.6M)	✅ +312.1%	✅ Rs. 5 crore (profit)	Rs. (42) crore	Rs. 48 crore
Going-out	⚠️ Rs. 189 crore ($21.3M)	⚠️ -8.7%	⚠️ Rs. (57) crore (loss)	Rs. (48) crore	Rs. 18 crore
All other segments (residual)	Rs. 2 crore ($0.2M)	n/m	⚠️ Rs. (54) crore	Rs. (45) crore	Rs. (7) crore
Total segment result	Rs. 13,590 crore gross		✅ Rs. 413 crore	Rs. 325 crore	Rs. 405 crore

India food ordering and delivery stayed the only segment profitable in every quarter shown, posting its best-ever result again (Rs. 518 crore, up 11.4% QoQ and 48.4% YoY) on steady 9.9% QoQ revenue growth - the series' most reliable engine, unaffected by any of this quarter's accounting complications. Hyperpure posted its first-ever quarterly segment profit (Rs. 1 crore, from a Rs. 5 crore loss) even as its own revenue collapsed 55.4% QoQ - the exact inverse of what a reader would expect from a shrinking business, and a direct consequence of the reclassification: Hyperpure no longer carries the lower-margin B2B commodity sales to Blinkit-platform sellers that the transition moved onto Blinkit's own books, so what's left is a smaller but structurally cleaner business (see Beyond the Usual).

Quick commerce (Blinkit) swung back to a small profit (Rs. 5 crore, from a Rs. 42 crore loss) on revenue that more than quadrupled QoQ - but the profit margin implied by that revenue base (0.05%) is far thinner than a year ago's 4.15% (Rs. 48 crore profit on Rs. 1,156 crore revenue), because the reclassification inflates the revenue denominator without a matching improvement in the underlying unit economics. Read in isolation, "Blinkit turned profitable again on quadrupled revenue" sounds unambiguously good; read against the accounting change, it's closer to "Blinkit's genuine operating trend improved modestly, on a revenue base that's no longer comparable to its own history" (see The Prescription).

Going-out extended its losing streak to a fourth straight quarter, with the loss widening again (Rs. 48 crore to Rs. 57 crore) on revenue that fell 8.7% QoQ - continuing the deterioration first flagged in the Q3 FY25 post and unresolved through three subsequent quarters, a year after the OTPL/WEPL movie-ticketing and events acquisitions were meant to diversify this segment. All other segments widened its loss further (Rs. 45 crore to Rs. 54 crore) - still immaterial in absolute size relative to the group, but persistently negative with no segment-level detail given on why.

Beyond the Usual

This quarter's source document restores a full balance sheet and half-year cash-flow statement (both missing last quarter), giving genuinely more to work with than the prior post's bare income statement.

An accounting switch, not demand, explains most of this quarter's revenue jump

Quick Commerce's segment revenue grew 312.1% QoQ (Rs. 2,400 crore to Rs. 9,891 crore) in the same quarter Hyperpure's B2B segment revenue fell 55.4% QoQ (Rs. 2,295 crore to Rs. 1,023 crore) - a near-mirror swing that's the direct result of the marketplace-to-inventory-led transition the company first disclosed only qualitatively last quarter. The company still hasn't published a rupee figure for the reclassification's size, but the balance sheet now makes the scale unmistakable: consolidated inventories rose from Rs. 176 crore to Rs. 1,502 crore since March 31, 2025, and purchases of stock-in-trade jumped from Rs. 2,557 crore to Rs. 8,795 crore QoQ. Standalone (parent-only) revenue, unaffected by how Blinkit books its sales, grew only 9.8% QoQ - a stark contrast to the consolidated headline's 89.6% - that's the clearest available evidence of how much of this quarter's "growth" is a change in accounting basis rather than more transactions happening. Quick Commerce revenue is no longer comparable on a like-for-like basis to any quarter before Q1 FY26, and the company has not said so explicitly anywhere in the filing.

Blinkit's cumulative losses since acquisition now exceed 90% of the deal's own goodwill

The standalone financial statements' parental-support note discloses cumulative losses at three subsidiaries as of September 30, 2025: Zomato Hyperpure Private Limited (ZHPL) Rs. 998 crore (up from Rs. 983 crore last quarter), Zomato Entertainment Private Limited (ZEPL) Rs. 157 crore (up from Rs. 139 crore), and Blink Commerce Private Limited (BCPL, i.e. Blinkit) Rs. 3,200 crore since its August 2022 acquisition (up from Rs. 2,696 crore last quarter - a Rs. 504 crore jump in a single quarter, the largest single-quarter increase this series has recorded). Against the roughly Rs. 3,507 crore of goodwill allocated to the Blinkit acquisition (see the Q4 FY24 post), Blinkit's cumulative loss now stands at approximately 91.3% of that goodwill - up from 77% last quarter - and the Board again concluded no impairment is required as of September 30, 2025. The ratio keeps climbing every quarter by construction, since the accumulated total only ever adds.

The consolidated tax rate eased from last quarter's spike but is still nearly double the parent's own rate

The consolidated effective tax rate fell to 49.6% this quarter (Rs. 64 crore tax on Rs. 129 crore PBT), down from last quarter's unusually high 71.6%, but still well above the standalone parent's own 10.4% rate (Rs. 80 crore tax on Rs. 771 crore standalone PBT) and a year ago's 25.7% (Q2 FY25). The improvement is mechanical rather than structural: the gap between standalone and consolidated PBT - loss-making subsidiaries eroding the profitable parent's own profit on consolidation - actually widened slightly, from Rs. 593 crore last quarter to Rs. 642 crore this quarter, but consolidated PBT itself grew faster than the tax bill did, pulling the ratio down. The same structural feature flagged last quarter - subsidiary losses that don't generate an equivalent consolidated tax benefit - is still in place; it's just less painful this quarter because pre-tax profit recovered.

Hyperpure posted its first-ever quarterly segment profit (Rs. 1 crore) this quarter, even as its revenue fell 55.4% QoQ - the reclassification that moved lower-margin B2B commodity sales onto Blinkit's own books appears to have left Hyperpure smaller but structurally cleaner, a genuine (if accounting-assisted) milestone for a segment that's run at a loss in every prior quarter this series has covered.

Eternal Limited is incorporating a new wholly-owned subsidiary, Eternal General Service Foundation, approved at the same board meeting that reported these results. Per the disclosure, the Foundation will engage in "charitable and social welfare activities including but not limited to hunger relief, healthcare, education, environmental sustainability, disaster response, social empowerment, animal welfare, and other public welfare programs," funded with Rs. 10 lakh of paid-up capital - a modest first step into a formal CSR vehicle, distinct from the company's core commercial operations.

The standing GST dispute's disclosed scope held steady this quarter, unlike the drift flagged last quarter. This filing describes the same Rs. 420 crore of Orders (October 2019-March 2022) as covering "all the States," identical wording to last quarter's note, alongside the same Rs. 21 crore of Show Cause Notices (April 2022-March 2023) specifically naming Andhra Pradesh and Gujarat. No provision is booked against either amount, and the company continues to say it has a strong case on merits - the dispute itself is unchanged in size or status, and for the first time in two quarters, its stated geography didn't move either.

The auditor's review again notes that 20 subsidiaries and 1 trust weren't reviewed by their own auditors, with their unaudited financial information showing total assets of Rs. 2,165 crore, total revenue of Rs. 48 crore for the quarter, and a total loss after tax of Rs. 54 crore for the quarter - management represents this information isn't material to the Group. At roughly 5.7% of consolidated total assets (Rs. 38,115 crore), this remains a genuine but modest audit-scope gap, consistent with the pattern this series has tracked since Blinkit's original consolidation.

Target Valuation Range

Eternal is trading at roughly Rs. 2,96,205 crore market cap - 5.45x annualized and 9.26x TTM revenue, down from 8.37x/10.34x last quarter, though the drop is mostly an accounting artifact rather than a genuine re-rating (see below). Eternal's stock is priced for a growth rate that isn't fully real - this quarter's headline revenue acceleration is substantially an accounting artifact, and on a like-for-like basis (standalone revenue, or the segment result actually generated), the business grew far more modestly than the price-to-sales compression below would suggest.

Eternal's shares closed at Rs. 325.50 on September 30, 2025, up 23.2% from the Rs. 264.15 close at the end of Q1 FY26 - a more moderate move than last quarter's 31% rebound, but still a meaningful re-rating, and within this series' two-year price-history window (October 2023 to September 2025) the stock is near its highest level yet, having roughly tripled from around Rs. 105 two years earlier. No stock split has occurred in that window, so this is a like-for-like nominal comparison.

With paid-up equity share capital of Rs. 910 crore at Rs. 1 face value, that implies approximately 910 crore shares outstanding at quarter-end - up modestly from Q1 FY26's 908 crore on continued ESOP issuance.

Market cap buildup	Q1 FY26	Q2 FY26
Share price (period-end)	Rs. 264.15	Rs. 325.50
Shares outstanding	~908 crore	~910 crore
Market capitalization	Rs. 2,39,848 crore	Rs. 2,96,205 crore ($33.34B)

Market cap tracked the share-price move almost exactly.

Peer-multiple sanity check	Q1 FY26	Q2 FY26
Revenue (annualized)	Rs. 28,668 crore	Rs. 54,360 crore
Revenue (TTM)	Rs. 23,204 crore	Rs. 31,995 crore
P/S (annualized quarter revenue)	8.37x	5.45x
P/S (TTM revenue)	10.34x	9.26x

Both multiples' drop is itself mostly an artifact of the reclassification inflating the revenue base, not the stock getting genuinely cheaper relative to comparable prior-period economics - a multiple that looks cheaper because the denominator changed its own accounting basis isn't a real re-rating signal, and shouldn't be read as one.

There's still no comparably-sized listed pure-play Indian food-delivery-plus-quick-commerce peer to build a direct multiple against; Swiggy remains the closest, but its own quarterly results still haven't been sourced for this series, so a side-by-side comparison isn't attempted here.

A real discounted-cash-flow model remains out of reach this quarter, and for a new reason beyond last quarter's missing cash-flow statement: the one now available shows free cash flow swinging to roughly negative Rs. 750 crore for H1 FY26 (Rs. 38 crore of operating cash flow against Rs. 788 crore of capex), from roughly positive Rs. 60 crore in H1 FY25 - a genuine deterioration, not a data gap, and one large and recent enough that projecting it forward with any confidence isn't credible yet. Between a revenue base whose growth rate is partly an accounting artifact and a cash-flow trend that just turned sharply negative, the peer-multiple read above is the only valuation tool this series can respectably offer this quarter - and it points toward a stock priced for more real growth than this quarter's numbers, read carefully, actually support.

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