ETERNAL Net Income Rose for a Second Straight Quarter - So Why Is the Founder Stepping Down as CEO?

A Founder Hands Over the Company the Same Quarter Blinkit Turns Genuinely Profitable

This is Eternal Limited's (formerly Zomato Limited) Q3 FY26 results - the quarter and nine months ended December 31, 2025, board-approved January 21, 2026 - the twenty-first quarter as a public company covered in this series. The filing is a bare "Outcome of Board Meeting" disclosure: an unaudited consolidated and standalone income statement with a limited review (not an audit) by Deloitte Haskins & Sells, plus a segment footnote and a handful of standard notes. No balance sheet, no cash-flow statement, no presentation deck, and no transcript accompanied it - consistent with Q1 FY26's pattern, since Ind AS 34 only requires a full balance sheet and cash-flow statement for the half-year and year-end filings, not every interim quarter.

The same board meeting that approved these numbers also approved something with nothing to do with the P&L: founder Deepinder Goyal resigned as Managing Director & Chief Executive Officer, effective the close of business on February 1, 2026. The Board recommended he move to Vice Chairman for a five-year term (subject to shareholder approval), while Albinder Singh Dhindsa - currently CEO of Blinkit, the company's fastest-growing and now genuinely profitable segment - steps up as CEO of the entire group effective the same date. This is a real, material governance event, not a footnote: it's the first change of chief executive in the company's history as a public company, and it hands the top job to the person who has run Quick Commerce through its accounting transition and into its first real segment profit (see Beyond the Usual).

Consolidated revenue from operations grew 20.1% QoQ to Rs. 16,315 crore, up 201.9% YoY from Rs. 5,405 crore a year earlier. Unlike the last two quarters, this growth rate is far closer to a genuine, comparable pace: Quick Commerce's own segment revenue grew 23.9% QoQ (Rs. 9,891 crore to Rs. 12,256 crore) - a sharp deceleration from last quarter's reclassification-driven 312.1% spike - while Hyperpure's B2B segment revenue actually grew 4.6% QoQ (Rs. 1,023 crore to Rs. 1,070 crore), reversing last quarter's 55.4% collapse. The marketplace-to-inventory-led transition that dominated the prior two posts appears to have largely worked through the base by this quarter - though a wedge still exists: standalone (parent-only) revenue grew a more modest 8.8% QoQ to Rs. 2,883 crore, meaningfully behind the consolidated figure's 20.1%, so the accounting basis still isn't fully clean, just far less distorting than it was.

Net income rose for a second straight quarter, up 56.9% QoQ to Rs. 102 crore from Rs. 65 crore - continuing the recovery first flagged last quarter after five straight quarterly declines, and now the strongest quarter since Q1 FY25's Rs. 253 crore peak. Profit before tax rose 31.8% QoQ (Rs. 129 crore to Rs. 170 crore), and the consolidated effective tax rate eased to 40.0% (Rs. 68 crore tax on Rs. 170 crore PBT), down from last quarter's 49.6%, though still meaningfully above the standalone parent's own 11.2% rate (Rs. 83 crore tax on Rs. 740 crore standalone PBT). The standalone-versus-consolidated PBT gap - loss-making subsidiaries eroding the parent's own profit on consolidation - narrowed to Rs. 570 crore from Rs. 642 crore last quarter, a genuine (if still large) improvement.

The Prescription

Put a number on the leadership transition's operating stakes, not just the announcement. Albinder Singh Dhindsa inherits a company where the segment he personally ran, Quick Commerce, just swung to its best-ever real segment profit (Rs. 202 crore, from Rs. 5 crore) on growth that finally slowed to a comparable pace - genuinely strong preparation for the top job. But he also inherits Going-out, a segment that's now lost money for five straight quarters and whose loss just doubled QoQ (Rs. 57 crore to Rs. 114 crore), and a standalone parental-support disclosure that went quieter, not louder, the same quarter a new CEO took over (see Beyond the Usual). The company should use the CEO transition as the natural moment to restart the presentation deck and granular operational disclosure (GOV, store counts, Contribution margin) that's been absent for three straight quarters - a new CEO explaining his own priorities with real numbers behind them would be a stronger opening statement than another bare regulatory filing.

Stop letting Going-out's losses widen without comment while everything else improves. Every other segment either held or improved its result this quarter - India food ordering and delivery hit another record, Hyperpure and Quick Commerce both turned real profits - which makes Going-out's fifth straight loss-making quarter (and its sharpest single-quarter deterioration yet, +100% QoQ) stand out precisely because it's now the one outlier in an otherwise genuinely improving business. A segment that's lost money in every quarter since its OTPL/WEPL movie-ticketing acquisitions closed in August 2024 needs either a credible turnaround plan stated plainly, or an honest acknowledgment that the diversification bet isn't working yet.

Key Financial Metrics

Q3 FY26 (quarter ended December 31, 2025, unaudited, limited review) vs Q2 FY26 (quarter ended September 30, 2025) and Q3 FY25 (quarter ended December 31, 2024) - consolidated, reported in INR crore and USD (converted at approximately Rs. 89.77/$1, the December 2025 month-end rate, applied across all periods shown for consistency)

Metric	Q3 FY26	Q2 FY26	QoQ	Q3 FY25	YoY
Revenue from Operations	✅ Rs. 16,315 crore ($1,817.4M)	Rs. 13,590 crore ($1,514.0M)	✅ +20.1% (largely comparable now, see above)	Rs. 5,405 crore ($602.2M)	✅ +201.9%
Operating Income (Profit before tax)	✅ Rs. 170 crore ($18.9M)	Rs. 129 crore ($14.4M)	✅ +31.8%	Rs. 124 crore ($13.8M)	✅ +37.1%
Net Income (Profit for the period)	✅ Rs. 102 crore ($11.4M)	Rs. 65 crore ($7.2M)	✅ +56.9%	Rs. 59 crore ($6.6M)	✅ +72.9%
Adjusted EBITDA (management non-GAAP)	Not disclosed - no presentation deck filed	Not disclosed	n/a	Not disclosed	n/a
Free Cash Flow	Not available - no cash-flow statement filed this quarter (not required for a Q3 interim period under Ind AS 34)	~Rs. (750) crore, H1 FY26	n/a	Not available	n/a
Total Cash and Cash Equivalents	Not available - no balance sheet filed this quarter	Not available	n/a	Not available	n/a

Total segment result (the sum of all five segments before unallocated corporate costs, other income, finance costs, and depreciation) was ✅ Rs. 595 crore, up 44.1% QoQ from Rs. 413 crore, and up 57.0% YoY from Rs. 379 crore (see Segment Results) - operating improvement that outpaced even the strong headline revenue growth this quarter.

Trailing-eight-quarter view (Q4 FY24 through Q3 FY26, INR crore): revenue Rs. 3,562 → Rs. 4,206 → Rs. 4,799 → Rs. 5,405 → Rs. 5,833 → Rs. 7,167 → Rs. 13,590 → Rs. 16,315 (unbroken growth throughout, though the last three quarters carry a materially different accounting basis for Quick Commerce than everything before them); net income Rs. 175 → Rs. 253 → Rs. 176 → Rs. 59 → Rs. 39 → Rs. 25 → Rs. 65 → Rs. 102 (five straight declines from the Q1 FY25 peak, now reversed for two consecutive quarters). This is the first trailing-eight-quarter window in the series to show genuine sequential net-income growth in back-to-back quarters, and the first in three quarters where the QoQ revenue growth rate (20.1%) looks like a plausible, comparable pace rather than an accounting-driven outlier.

Standalone (parent-only) figures still lag the consolidated growth rate, but less dramatically than last quarter: standalone revenue grew 8.8% QoQ to Rs. 2,883 crore (vs consolidated's 20.1%), while standalone profit before tax actually fell 4.0% QoQ to Rs. 740 crore and standalone net income fell 4.9% QoQ to Rs. 657 crore - a quiet divergence at the parent-entity level, where revenue grew but profit shrank, driven by advertising and sales-promotion spend rising faster (Rs. 464 crore to Rs. 567 crore, +22.2% QoQ) than standalone revenue itself.

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 remain not available this quarter - the same gap flagged for three straight quarters now. With no balance sheet filed either, even the inventory-level proxy used last quarter isn't available this time; the segment revenue and result figures below are the only operational read available.

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 (Q3 FY26)	QoQ	Segment Result (Q3 FY26)	Q2 FY26 Result	Q3 FY25 Result
India food ordering and delivery	✅ Rs. 2,676 crore ($298.1M)	✅ +7.7%	✅ Rs. 547 crore (profit)	Rs. 518 crore	Rs. 432 crore
Hyperpure	✅ Rs. 1,070 crore ($119.2M)	✅ +4.6%	✅ Rs. 7 crore (profit)	Rs. 1 crore	Rs. (9) crore
Quick commerce (Blinkit)	✅ Rs. 12,256 crore ($1,365.3M)	✅ +23.9%	✅ Rs. 202 crore (profit)	Rs. 5 crore	Rs. 165 crore
Going-out	⚠️ Rs. 300 crore ($33.4M)	✅ +58.7%	⚠️ Rs. (114) crore (loss)	Rs. (57) crore	Rs. 3 crore
All other segments (residual)	Rs. 13 crore ($1.4M)	n/m	⚠️ Rs. (47) crore	Rs. (54) crore	Rs. 1 crore
Total segment result	Rs. 16,315 crore gross		✅ Rs. 595 crore	Rs. 413 crore	Rs. 379 crore

India food ordering and delivery posted its best-ever result again (Rs. 547 crore, up 5.6% QoQ and 26.6% YoY) on steady 7.7% QoQ revenue growth - the series' most reliable engine, now profitable in every quarter this series has covered.

Hyperpure turned a genuine profit for a second straight quarter (Rs. 7 crore, up from Rs. 1 crore), this time on growing revenue (+4.6% QoQ) rather than the shrinking base that produced last quarter's first-ever profit - a cleaner, more repeatable result than last quarter's reclassification-assisted one.

Quick commerce (Blinkit) delivered its best-ever segment result by a wide margin - Rs. 202 crore, up from Rs. 5 crore last quarter and Rs. 165 crore a year earlier - while revenue growth cooled from 312.1% QoQ to a far more sustainable 23.9%. The implied margin on this quarter's revenue base (1.6%) is still thin compared to a year ago's marketplace-model 11.8% (Rs. 165 crore on Rs. 1,399 crore), but the two aren't directly comparable given the accounting basis changed in between (see Beyond the Usual); read on its own terms, this is the clearest evidence yet that Blinkit's underlying economics, not just its accounting presentation, are genuinely improving.

Going-out posted its fifth straight loss-making quarter, and its worst one yet - the loss doubled QoQ (Rs. 57 crore to Rs. 114 crore) even as revenue jumped 58.7% QoQ, meaning costs grew faster than the top line by a wide margin. This continues the deterioration first flagged in the Q3 FY25 post and now unresolved through five subsequent quarters, well over a year after the OTPL/WEPL acquisitions were meant to diversify this segment. All other segments narrowed its loss slightly (Rs. 54 crore to Rs. 47 crore) - still immaterial in absolute size relative to the group.

A same-period peer comparison point: Swiggy's own Quick Commerce arm, Instamart, moved in the opposite direction this quarter - its segment loss widened to Rs. 791 crore from Rs. 739 crore QoQ even as its revenue growth decelerated to 3.7% QoQ, its slowest pace in that series' backfill. The same quarter Eternal's Blinkit swung to its best-ever real profit on cooling-but-still-healthy growth, Swiggy's Instamart posted its worst quarter yet on both counts - a genuine divergence between India's two listed quick-commerce operators this quarter, not just a difference in disclosure.

Beyond the Usual

This quarter's source document is thinner than last quarter's - no balance sheet, no cash-flow statement, and less granular subsidiary detail than the last full filing - so the footnote-mining base is smaller than usual, and it's said plainly rather than padded with items that don't add real signal.

The founder stepped down as CEO the same quarter the business he built showed its clearest sign yet of durable improvement

Deepinder Goyal, Eternal's founder and CEO since the company's inception, resigned as Managing Director & Chief Executive Officer effective the close of business on February 1, 2026 - the first change of chief executive in the company's history as a public company. The Board recommended his appointment as Vice Chairman for a five-year term, subject to shareholder approval, so he remains on the Board rather than departing entirely. Albinder Singh Dhindsa, currently CEO of Blinkit (Quick Commerce), was approved as the new Group CEO effective the same date. The succession appears orderly - an internal promotion of the executive who has run the company's fastest-growing, now genuinely profitable segment, with the founder staying involved as Vice Chairman rather than exiting - but a change of this kind is inherently worth watching closely over the next several quarters: whether strategic priorities, capital allocation, or the pace of disclosure shift under new leadership.

The GST dispute's Andhra Pradesh component escalated from a show-cause notice to a formal demand order

The standing GST dispute over delivery-charge collections is now described with more granularity than last quarter's filing: the Rs. 420 crore of Orders covering October 2019-March 2022 across all states is unchanged, but the filing now separately discloses an additional Rs. 8 crore Order specifically for Andhra Pradesh covering April 2022-March 2023 - previously described only as part of a combined Rs. 21 crore Show Cause Notice figure spanning Andhra Pradesh and Gujarat. Gujarat's Rs. 13 crore for the same period remains at the Show Cause Notice stage. The total disputed quantum is essentially unchanged (Rs. 441 crore combined, versus last quarter's equivalent Rs. 441 crore), but Andhra Pradesh's portion has moved from an unresolved notice to a formal demand - a real procedural escalation even though the company continues to say it has a strong case on merits and books no provision against any of it.

The standalone filing dropped the subsidiary cumulative-loss figures it disclosed just last quarter

Last quarter's standalone financial statements itemized cumulative losses at three subsidiaries by name - Zomato Hyperpure Private Limited (Rs. 998 crore), Zomato Entertainment Private Limited (Rs. 157 crore), and Blink Commerce Private Limited/Blinkit (Rs. 3,200 crore, then above 90% of the goodwill booked for its acquisition). This quarter's equivalent parental-support note describes the same five subsidiary companies (adding Orbgen Technologies and Wasteland Entertainment) but discloses no specific rupee figures for any of their cumulative losses, only that they've "incurred significant expenses for building the brand, market share and operations which have added to the losses of these entities." Without those figures, Blinkit's goodwill-to-cumulative-loss ratio - a thread this series has tracked every quarter since the acquisition - can't be updated this quarter. This is a genuine reduction in disclosure granularity, not a data gap caused by the underlying numbers becoming less material; if anything, Blinkit's own segment result just turned sharply more profitable, making the omission harder to explain as immateriality.

The audit-scope subsidiaries' combined loss more than doubled quarter-over-quarter, with less context than before

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 revenue of Rs. 136 crore and a total loss after tax of Rs. 120 crore for the quarter - both roughly double last quarter's equivalent figures (Rs. 48 crore revenue, Rs. 54 crore loss). Unlike last quarter's disclosure, this filing doesn't state the total assets of these unreviewed entities, so their loss can't be sized as a percentage of consolidated total assets this quarter (no balance sheet was filed at all, consolidated or otherwise). Management continues to represent that this information isn't material to the Group; a growing loss pool with less context to check that claim against is worth continued attention, even without evidence anything is being hidden.

The Government of India notified the Code on Social Security, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, the Industrial Relations Code, 2020, and the Code on Wages, 2019 (collectively, the Labour Codes) on November 21, 2025, replacing existing central labour legislation - draft rules under the Codes were released by the Ministry of Labour and Employment on December 30, 2025 and are yet to be notified, and various state governments have also notified state-specific rules. Based on the company's own assessment, the provisions currently in force don't have a material impact on the Group's financial results, though the financial impact, if any, of the remaining provisions will be assessed once the final rules and their effective dates are known - a genuinely new disclosure item this quarter, and one worth tracking as the remaining rules come into force.

Zomato Internet Hizmetleri Ticaret Anonim Sirketi, a Turkish subsidiary, ceased to be part of the Group as of December 9, 2025, per the auditor's list of reviewed entities - a small, quiet exit consistent with this series' recurring pattern of small international entities (Zomato Foods, the Zomato Ireland Lebanon branch) being wound down over time rather than scaled.

Target Valuation Range

Eternal is trading at roughly Rs. 2,53,304 crore market cap - 3.88x annualized and 5.91x TTM revenue, down from 5.45x/9.26x last quarter. Eternal's stock got modestly cheaper on a revenue basis this quarter for a healthier reason than last quarter's compression - the price fell, and the revenue base is finally growing at a rate that's largely comparable to prior periods, rather than the multiple shrinking mostly because the denominator's own accounting basis changed.

Eternal's shares closed at Rs. 278.05 on December 31, 2025, down 14.6% from the Rs. 325.50 close at the end of Q2 FY26 - the sharpest single-quarter decline since the Q4 FY25 post's 27.5% drop, and a move that coincides with this quarter's leadership transition, though the filing itself gives no basis to attribute the decline specifically to that announcement versus broader market movement. Within this series' two-year price-history window (January 2024 to December 2025), the stock has moved from a low near Rs. 139.55 (January 2024) to a high of Rs. 325.50 (September 2025) before this quarter's pullback - a real, wide swing worth noting, even though this specific quarter's move alone (-14.6%) is more moderate than several prior quarters' single-quarter changes. No stock split has occurred in that window, so this remains a like-for-like nominal comparison.

With paid-up equity share capital of Rs. 911 crore at Rs. 1 face value, that implies approximately 911 crore shares outstanding at quarter-end - essentially flat from Q2 FY26's 910 crore.

Market cap buildup	Q2 FY26	Q3 FY26
Share price (period-end)	Rs. 325.50	Rs. 278.05
Shares outstanding	~910 crore	~911 crore
Market capitalization	Rs. 2,96,205 crore	Rs. 2,53,304 crore ($28.22B)

Market cap tracked the share-price decline almost exactly, since the share count barely moved.

Peer-multiple sanity check	Q2 FY26	Q3 FY26
Revenue (annualized)	Rs. 54,360 crore	Rs. 65,260 crore
Revenue (TTM)	Rs. 31,995 crore	Rs. 42,905 crore
P/S (annualized quarter revenue)	5.45x	3.88x
P/S (TTM revenue)	9.26x	5.91x

Unlike last quarter's compression - which was mostly an artifact of the revenue base's own accounting reclassification - this quarter's drop reflects a real mix of both forces: the share price genuinely fell, and revenue growth is now closer to a comparable, sustainable pace rather than an accounting-driven outlier.

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, and this series' Swiggy coverage now runs through the same December 2025 quarter, giving a genuine same-period comparison point (see Segment Results above) - but Swiggy's own consolidated business is still loss-making at the group level, so a direct P/S-to-profitability comparison isn't apples-to-apples yet.

A real discounted-cash-flow model remains out of reach this quarter, for the same reason it was last quarter and the quarter before: no cash-flow statement was filed (normal for this interim period under Ind AS 34, but it still means free cash flow and total cash can't be verified), so there's no way to check whether H1 FY26's roughly negative Rs. 750 crore free cash flow improved, worsened, or held steady through the December quarter. Between a valuation base whose growth rate is finally comparable again and a cash-flow trend that simply can't be checked this quarter, the peer-multiple read above is the only valuation tool this series can respectably offer - and it points toward a stock that got somewhat cheaper for genuine reasons this time, though still without the free-cash-flow visibility needed to call it undervalued outright.

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