ETERNAL Net Income Rose for a Third Straight Quarter - So Why Did the Full Fiscal Year Fall 31%?

A Year Where Every Segment Improved, and Profit Still Fell

This is Eternal Limited's (formerly Zomato Limited) Q4 FY26 results - the quarter and financial year ended March 31, 2026, board-approved April 28, 2026 - the twenty-second quarter as a public company covered in this series, and the first audited year-end filing since Q4 FY25's. Unlike the last three quarters, this filing carries the full package: an audited annual consolidated and standalone income statement (with the quarter itself being, as always for a Q4, the balancing figure between the audited full year and the reviewed year-to-date figures through Q3), a complete audited balance sheet, and a full-year cash-flow statement - all reviewed with an unmodified opinion from Deloitte Haskins & Sells, carrying the same standing Emphasis of Matter over the GST dispute (see Beyond the Usual) that has appeared in every annual filing since FY24. No presentation deck or earnings-call transcript accompanied this filing, consistent with the pattern since Q2 FY25.

Consolidated net income rose for a third straight quarter, up 70.6% QoQ to Rs. 174 crore from Rs. 102 crore - continuing the recovery first flagged two quarters ago and now at its highest level since Q1 FY25's Rs. 253 crore peak. Total segment result grew 16.6% QoQ to Rs. 694 crore, its best quarter yet, with the consolidated effective tax rate easing to 23.7% (Rs. 54 crore tax on Rs. 228 crore PBT) from last quarter's 40.0% - the clearest single quarter of genuine operating and tax-mix improvement in this series' recent stretch.

Zoom out to the full fiscal year, though, and the same numbers tell the opposite story. FY2026 consolidated net income fell 30.6% to Rs. 366 crore from Rs. 527 crore in FY2025 - a real annual decline - even though full-year total segment result grew 41.3% to Rs. 2,027 crore from Rs. 1,435 crore, with every core segment either turning profitable or expanding its profit for the year. The gap between an improving operating business and a shrinking bottom line comes down to two lines below segment result: full-year finance costs rose 154.5% (Rs. 154 crore to Rs. 392 crore) and full-year depreciation and amortisation rose 85.1% (Rs. 863 crore to Rs. 1,597 crore) - both driven by the same cause, Blinkit's shift from a marketplace model to an inventory-led one that requires the company to hold its own warehousing leases and inventory rather than simply taking a commission (see Beyond the Usual and Segment Results). Those two cost lines alone grew by Rs. 972 crore combined over the year - more than wiping out the Rs. 592 crore improvement in segment result. Eternal's FY2026 is a year the underlying businesses got structurally more profitable while the capital structure supporting that shift got expensive enough to erase the gain - the real driver behind this year's numbers, and the thread every other section below traces back to.

The Prescription

Eternal should use this year-end filing's own numbers to make an explicit, quantified case for why its finance-cost and depreciation growth is temporary rather than structural - something the current disclosure doesn't do. Right now, a reader has to infer from the balance sheet (lease liabilities up 124.6% to Rs. 4,592 crore, inventories up more than twelvefold to Rs. 2,181 crore) that the P&L hit is Blinkit's real-estate and inventory buildout rather than a permanent cost-structure shift, but management hasn't said so directly in any filed document this year. With food delivery, Hyperpure, and Quick Commerce all now reliably profitable at the segment level - a genuine first for this series - the company has real operating credibility to spend on restoring the presentation deck and management commentary it stopped filing three quarters ago; a business generating this much segment profit deserves the disclosure of one still proving itself.

Stop letting the standalone parental-support note go quieter precisely when it should get louder. This is the second consecutive filing - and now the first annual filing - where the note describing Blinkit's, Hyperpure's, and the other development-stage subsidiaries' financial support omits the specific cumulative-loss rupee figures it disclosed as recently as Q2 FY26. Fiscal year-end is exactly when Ind AS 36 requires a goodwill impairment test, and goodwill sat flat at Rs. 5,737 crore with no impairment recognized - a reasonable outcome given Blinkit's swing to a genuine full-year segment profit, but one a reader can no longer independently sanity-check without the subsidiary-level loss figures the company used to disclose. Restoring that granularity costs nothing and would remove a legitimate line of doubt about a conclusion that may well be correct.

Key Financial Metrics

Q4 FY26 (quarter ended March 31, 2026, unaudited quarter, audited year) vs Q3 FY26 (quarter ended December 31, 2025) and Q4 FY25 (quarter ended March 31, 2025) - consolidated, reported in INR crore and USD (converted at approximately Rs. 93.48/$1, the March 2026 month-end rate, applied across all periods shown for consistency)

Metric	Q4 FY26	Q3 FY26	QoQ	Q4 FY25	YoY
Revenue from Operations	✅ Rs. 17,292 crore ($1,849.7M)	Rs. 16,315 crore ($1,745.2M)	✅ +6.0%	Rs. 5,833 crore ($623.8M)	✅ +196.5%
Operating Income (Profit before tax)	✅ Rs. 228 crore ($24.4M)	Rs. 170 crore ($18.2M)	✅ +34.1%	Rs. 97 crore ($10.4M)	✅ +135.1%
Net Income (Profit for the period)	✅ Rs. 174 crore ($18.6M)	Rs. 102 crore ($10.9M)	✅ +70.6%	Rs. 39 crore ($4.2M)	✅ +346.2%
Adjusted EBITDA (management non-GAAP)	Not disclosed - no presentation deck filed	Not disclosed	n/a	Not disclosed	n/a
Free Cash Flow (full year, first genuinely comparable annual figure)	⚠️ ~Rs. (1,119) crore ($(119.7)M), FY2026	n/a (half-year only last disclosed)	n/a	⚠️ ~Rs. (628) crore, FY2025	⚠️ Wider by 78.2%
Total Cash and Cash Equivalents	✅ Rs. 996 crore ($106.5M)	Not available (no balance sheet last quarter)	n/a	Rs. 666 crore ($71.2M)	✅ +49.5%

Full fiscal year 2026 (audited): revenue ✅ Rs. 54,364 crore ($5,815.5M), up 168.5% YoY; total segment result ✅ Rs. 2,027 crore ($216.8M), up 41.3% YoY; profit before tax ⚠️ Rs. 615 crore ($65.8M), down 11.8% YoY from Rs. 697 crore; net income ⚠️ Rs. 366 crore ($39.1M), down 30.6% YoY from Rs. 527 crore. The consolidated effective tax rate for the full year rose to 40.5% (Rs. 249 crore tax on Rs. 615 crore PBT) from FY2025's 24.4% - a second driver of the annual profit decline, on top of the finance-cost and depreciation growth discussed above.

Trailing-eight-quarter view (Q1 FY25 through Q4 FY26, INR crore): revenue Rs. 4,206 → Rs. 4,799 → Rs. 5,405 → Rs. 5,833 → Rs. 7,167 → Rs. 13,590 → Rs. 16,315 → Rs. 17,292 (unbroken growth, though the last three quarters carry a materially different accounting basis for Quick Commerce); net income Rs. 253 → Rs. 176 → Rs. 59 → Rs. 39 → Rs. 25 → Rs. 65 → Rs. 102 → Rs. 174 (a five-quarter decline from the Q1 FY25 peak, a trough at Q1 FY26, and now three consecutive quarterly increases - the longest recovery streak this series has tracked). Read alongside the full-year numbers above, this is the clearest evidence yet that the recovery is genuine at the quarterly level even as the annual comparison still shows a company earning less than it did a year ago.

Standalone (parent-only) figures kept growing faster than they eroded: standalone revenue grew 2.4% QoQ to Rs. 2,953 crore ($315.9M) and 34.7% YoY, while standalone net income grew 7.3% QoQ to Rs. 705 crore ($75.4M) and 22.6% YoY. For the full year, standalone net income grew 35.5% to Rs. 2,655 crore ($284.0M) from Rs. 1,960 crore - a genuinely strong parent-level year. The standalone-versus-consolidated PBT gap - loss-making subsidiaries eroding the parent's own profit on consolidation - narrowed slightly this quarter (Rs. 546 crore, down from Rs. 570 crore last quarter) but widened sharply for the full year (Rs. 2,351 crore in FY2026 versus Rs. 1,493 crore in FY2025, up 57.5%) - the annual view makes clear that subsidiary losses are taking a larger, not smaller, bite out of group profit than a year ago, even as the most recent quarter improved.

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 four straight quarters now. The segment revenue and result figures below remain 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 (Q4 FY26)	QoQ	Segment Result (Q4 FY26)	Q3 FY26 Result	Q4 FY25 Result	FY26 Result	FY25 Result
India food ordering and delivery	✅ Rs. 2,737 crore ($292.8M)	✅ +2.3%	✅ Rs. 549 crore (profit)	Rs. 547 crore	Rs. 439 crore	Rs. 2,079 crore	Rs. 1,541 crore
Hyperpure	⚠️ Rs. 978 crore ($104.6M)	⚠️ -8.6%	✅ Rs. 13 crore (profit)	Rs. 7 crore	Rs. (8) crore	Rs. 16 crore	Rs. (43) crore
Quick commerce (Blinkit)	✅ Rs. 13,232 crore ($1,415.5M)	✅ +8.0%	✅ Rs. 265 crore (profit)	Rs. 202 crore	Rs. (82) crore	Rs. 430 crore	Rs. (21) crore
Going-out	⚠️ Rs. 277 crore ($29.6M)	⚠️ -7.7%	⚠️ Rs. (73) crore (loss, narrower QoQ)	Rs. (114) crore	Rs. (44) crore	Rs. (292) crore	Rs. (30) crore
All other segments (residual)	Rs. 68 crore ($7.3M)	n/m	⚠️ Rs. (60) crore	Rs. (47) crore	Rs. (16) crore	Rs. (206) crore	Rs. (12) crore
Total segment result	Rs. 17,292 crore gross		✅ Rs. 694 crore	Rs. 595 crore	Rs. 289 crore	✅ Rs. 2,027 crore	Rs. 1,435 crore

India food ordering and delivery posted another record result (Rs. 549 crore, essentially flat QoQ, up 25.1% YoY) on revenue growth that decelerated sharply to 2.3% QoQ from last quarter's 7.7% - still the series' steadiest engine, but the deceleration is worth watching next quarter given it's the segment's slowest sequential growth in over a year.

Hyperpure turned a genuine profit for a third straight quarter (Rs. 13 crore, up 85.7% QoQ) even as its own revenue kept shrinking (-8.6% QoQ, -46.8% YoY) - the segment is now smaller and more profitable at once, the clearest sign yet that the marketplace-to-inventory-led transition (which redirects B2B supply volume into Quick Commerce's own books) has structurally reduced Hyperpure's reported top line without hurting its bottom line. For the full year, Hyperpure swung to a Rs. 16 crore profit from a Rs. 43 crore loss.

Quick commerce (Blinkit) delivered its best-ever segment result for a second straight quarter (Rs. 265 crore, up 31.2% QoQ) on revenue growth of 8.0% QoQ - a healthy, no-longer-extraordinary pace compared with the reclassification-driven spikes of a year ago. The implied margin on segment revenue reached 2.0%, up from Q3's 1.6%, continuing a real (if still thin) improvement. For the full year, Blinkit swung from a Rs. 21 crore loss to a Rs. 430 crore profit - the single largest driver of the year's segment-level improvement, and the segment this series has tracked from a marketplace-model loss-maker to the group's second-most-profitable business line in under two years.

Going-out posted its sixth straight loss-making quarter, but the loss narrowed for the first time since the streak began - down 36.0% QoQ to Rs. 73 crore from Rs. 114 crore, even though the segment's revenue also fell 7.7% QoQ. That's a genuinely different pattern from the prior five quarters, where losses widened even as revenue grew; here, a smaller, presumably lower-cost quarter improved the result. The full-year picture is still stark: Going-out's FY2026 loss came to Rs. 292 crore, nearly ten times FY2025's Rs. 30 crore loss - by far the worst-performing segment on a year-over-year basis, even after this quarter's improvement, and the segment where the just-announced asset transfer to Wasteland Entertainment (see Beyond the Usual) is most directly relevant. All other segments widened its loss further (Rs. 47 crore to Rs. 60 crore) - still immaterial in absolute size relative to the group, but a sixth straight quarter without improvement.

A same-period peer comparison point: Swiggy's own Quick Commerce arm, Instamart, moved in a similar direction to last quarter's divergence but converged somewhat - its segment loss narrowed to Rs. 736 crore from Rs. 791 crore QoQ, its first improvement on both a sequential and year-over-year basis in this backfill, even as Blinkit posted an outright Rs. 265 crore profit in the same quarter. The gap between India's two listed quick-commerce operators remains wide in absolute terms - Blinkit profitable, Instamart still losing over Rs. 700 crore a quarter - but this is the first quarter in the series where both moved in the same (improving) direction rather than opposite ones.

Beyond the Usual

This is the first audited annual filing in three quarters, so the footnote base is richer than the last several bare interim filings - a real annual balance sheet, cash-flow statement, and audit-scope disclosure to mine, even without a presentation deck or transcript.

The standalone filing again omits the subsidiary cumulative-loss figures - now in the one filing where they would matter most

For a second consecutive quarter, the standalone financial statements' parental-support note describes Zomato Hyperpure, Zomato Entertainment, Blink Commerce (Blinkit), Orbgen Technologies, and Wasteland Entertainment only in general terms - "these subsidiary companies have incurred significant expenses for building the brand, market share and operations which have added to the losses of these entities" - without the specific cumulative-loss rupee figures disclosed as recently as the Q2 FY26 filing, which itemized Blinkit's cumulative loss at Rs. 3,200 crore, then above 90% of the deal's own acquisition goodwill. This is now the first annual filing to omit those figures, which matters more than an interim quarter would: fiscal year-end is exactly when Ind AS 36 requires management to test goodwill for impairment, and the consolidated balance sheet shows goodwill held flat at Rs. 5,737 crore with no impairment recognized. Blinkit's own full-year segment swing to a Rs. 430 crore profit makes "no impairment" a plausible outcome - but without the subsidiary-level cumulative-loss figure, a reader can no longer independently verify where that number now stands relative to the acquisition goodwill, at the one filing where the comparison would be most informative.

The GST dispute added a fourth notice - a new Andhra Pradesh show-cause for FY24

The standing GST dispute over delivery-charge collections now lists four distinct items rather than last quarter's three: the Rs. 420 crore of Orders for October 2019-March 2022 across all states (unchanged), the Rs. 8 crore Andhra Pradesh Order for April 2022-March 2023 (unchanged), the Rs. 13 crore Gujarat Show Cause Notice for the same period (unchanged), and a new Rs. 6 crore Andhra Pradesh Show Cause Notice covering April 2023-March 2024 - not present in the Q3 FY26 filing. The total disputed quantum rises to Rs. 447 crore from Rs. 441 crore. The company continues to state it has a strong case on merits and books no provision against any of it, and separately discloses that, effective September 22, 2025, it has begun paying GST on delivery charges collected on behalf of unregistered delivery partners following a change in law - a going-forward compliance change, not a resolution of the historical dispute.

Subsidiaries outside the auditor's direct review combined for a full-year loss nearly as large as the entire Group's net income

The auditor's report discloses, for the first time this series with full annual figures attached, two separate pools of subsidiaries outside Deloitte's own audit: 11 subsidiaries and 1 trust audited by other auditors (combined total assets of Rs. 2,384 crore, full-year revenue of Rs. 408 crore, and a full-year net loss after tax of Rs. 318 crore), plus a further 11 unaudited subsidiaries (combined total assets of Rs. 154 crore, full-year revenue of Rs. 13 crore, and a full-year net loss of Rs. 6 crore). Combined, these roughly 22 subsidiaries and a trust hold about 6.2% of consolidated total assets (Rs. 2,538 crore of Rs. 40,736 crore) but posted a combined full-year loss of about Rs. 324 crore - nearly as large as the Group's entire consolidated net income of Rs. 366 crore for the year. Management continues to represent that none of this is material to the Group, and the auditor's opinion is unmodified; the figures themselves are more granular than last quarter's single-bucket disclosure, which is a genuine improvement, even as the scale of the number itself is worth continued attention.

Deepinder Goyal's move from Managing Director & CEO to Vice Chairman - announced last quarter as pending shareholder approval - became final effective March 13, 2026, per shareholder vote. The filing also discloses a related technical change: effective February 1, 2026, the Group's chief operating decision maker (CODM) for segment-reporting purposes became the Chief Executive Officer alone, rather than the combined Managing Director and Chief Executive Officer role Goyal previously held; the auditor's notes confirm this change "did not result in any change in the identification of operating segments or the measurement of segment information" - a clean, disclosed continuity check on a governance change that could plausibly have affected how the business reports itself.

The same board meeting that approved these results also approved an asset transfer agreement between the Company and Wasteland Entertainment Private Limited (WEPL), its wholly owned events subsidiary, to transfer the technology stack of the District dining-and-events platform - along with its identified employees - for cash consideration of Rs. 24.19 crore, expected to complete May 1, 2026. The filing describes this as a related-party transaction conducted at arm's length. Coming the same quarter Going-out's full-year loss reached nearly ten times its prior-year level (see Segment Results), this reads as a plausible internal reorganization of the segment's technology and staffing rather than a business-scale event in its own right - though the filing gives no further detail on the rationale.

Zomato Netherlands B.V. ceased to be part of the Group as of January 27, 2026, per the auditor's list of reviewed entities - continuing this series' recurring pattern of small international entities (Zomato Foods, the Zomato Ireland Lebanon branch, and last quarter's Turkish subsidiary) being wound down over time rather than scaled.

Target Valuation Range

Eternal is trading at roughly Rs. 2,10,433 crore market cap - 3.04x annualized and 3.87x TTM revenue (against a deteriorating FY26 free cash flow of roughly negative Rs. 1,119 crore), down from 3.88x/5.91x last quarter. Eternal's stock got meaningfully cheaper on a revenue basis this quarter, and this time it's a genuine re-rating rather than an accounting-driven multiple shift - the share price fell further, while the revenue base kept growing on a now fully comparable basis.

Eternal's shares closed at Rs. 228.98 on March 30, 2026 (the last trading day of the quarter), down 17.6% from the Rs. 278.05 close at the end of Q3 FY26 - the second straight quarterly decline and, within this series' two-year price-history window (April 2024 to March 2026), a continuation of the pullback from the Rs. 325.50 high reached in September 2025. Over that same two-year window the stock also touched a low of Rs. 179.15 (May 2024), so the full range remains wide even as this specific quarter's move is more moderate than several earlier quarters' single-quarter swings. 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. 919 crore at Rs. 1 face value, that implies approximately 919 crore shares outstanding at quarter-end, up 0.9% from Q3 FY26's 911 crore.

Market cap buildup	Q3 FY26	Q4 FY26
Share price (period-end)	Rs. 278.05	Rs. 228.98
Shares outstanding	~911 crore	~919 crore
Market capitalization	Rs. 2,53,304 crore	Rs. 2,10,433 crore ($22.51B)

The decline outpaces the share-price move slightly because the share count also grew.

Peer-multiple sanity check	Q3 FY26	Q4 FY26
Revenue (annualized)	Rs. 65,260 crore	Rs. 69,168 crore
Revenue (TTM)	Rs. 42,905 crore	Rs. 54,364 crore (FY26 actual)
P/S (annualized quarter revenue)	3.88x	3.04x
P/S (TTM revenue)	5.91x	3.87x

Both multiples compressed for genuine reasons this time: the share price fell further, and the revenue base is now fully past the accounting-transition distortion that inflated last year's comparisons.

There remains no comparably-sized listed pure-play Indian food-delivery-plus-quick-commerce peer to build a direct multiple against; Swiggy stays the closest same-period comparison (see Segment Results above), though its own consolidated business - a full-year net loss of Rs. 4,154 crore per its own FY2026 filing - remains loss-making at the group level, so a direct P/S-to-profitability comparison still isn't apples-to-apples.

A real discounted-cash-flow model is possible in the sense that a full, audited annual cash-flow statement now exists - but the number it produces argues against relying on it: full-year free cash flow came to roughly negative Rs. 1,119 crore, a deeper cash burn than FY2025's roughly negative Rs. 628 crore, as capex nearly doubled (Rs. 936 crore to Rs. 1,751 crore) to fund Blinkit's inventory-led buildout while operating cash flow, though it also improved (Rs. 308 crore to Rs. 632 crore), didn't grow nearly as fast. A DCF built on a cash-flow trend that's getting more negative, not less, each year wouldn't produce a credible valuation range - it would just formalize the same conclusion the peer multiples already point to. Between a cheaper, now-comparable revenue multiple and a cash-flow picture that's genuinely deteriorating rather than merely unverifiable, the honest read is that the stock got cheaper for a real reason this quarter, but the free-cash-flow trend is the one metric in this filing moving the wrong way even as almost everything else at the segment level improved.

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