ETERNAL LIMITED

E-Retail/ E-Commerce

Annual Returns

Cumulative Returns and Drawdowns

Fundamentals

Ownership

Margined

AI Summary

asof: 2026-09-14

Eternal Limited — Recent Corporate Announcements

1. Headwinds and Challenges

GST on delivery charges. Eternal has received Show Cause Notices and Demand Orders from GST authorities covering: - October 2019 to March 2022 for all States, amounting to INR 420 crore - April 2022 to March 2024 for Andhra Pradesh, amounting to INR 14 crore - A Show Cause Notice for April 2022 to March 2023 for Gujarat, amounting to INR 13 crore

These notices and orders require the company to pay GST on delivery charges collected from end users on behalf of delivery partners, along with additional interest and penalties. The company is contesting them at appropriate forums and, supported by external expert advice, believes it has a strong case on merits. The ultimate outcome will be ascertained on disposal of the matter. From September 22, 2025, the Government included local delivery services provided through Electronic Commerce Operators by unregistered service providers under Section 9(5) of the CGST Act, 2017, and the company is now paying GST on such delivery charges.

Labour regulation transition. 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 with effect from November 21, 2025, with corresponding rules notified on May 08, 2026. Certain provisions are yet to be notified. Various State Governments have also notified their own gig and platform work legislations, but rules remain pending except in Karnataka, where rules were notified on November 19, 2025. Eternal is contesting the validity of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 before the appropriate forum. The operationalised Karnataka legislation does not have a material impact on the financial results. The financial impact of remaining provisions will be assessed upon notification of relevant rules.

Loss-making subsidiaries. The company has made long-term strategic investments in Zomato Hyperpure Private Limited, Zomato Entertainment Private Limited, Blink Commerce Private Limited, Orbgen Technologies Private Limited, and Wasteland Entertainment Private Limited. These subsidiaries have incurred expenses for building brand, market share, and operations, which have added to their losses. The parent has committed to provide support to each subsidiary if they are unable to meet individual liabilities. Based on review of performance and future plans, no impairment was required as on June 30, 2026.

Segment losses. In the quarter ended June 30, 2026, the Going Out segment reported a loss of INR 61 crore, and All Other Segments (Residual) reported a loss of INR 190 crore.

Unreviewed subsidiary financials. The consolidated results include interim financial information of 17 subsidiaries and 1 trust not reviewed by their auditors, reflecting total revenue of INR 215 crore, total loss after tax of INR 95 crore, and total comprehensive loss of INR 94 crore for the quarter ended June 30, 2026.

2. Tailwinds and Growth Prospects

Revenue growth. Consolidated revenue from operations rose to INR 20,211 crore in the quarter ended June 30, 2026, from INR 17,292 crore in the quarter ended March 31, 2026, and INR 7,167 crore in the quarter ended June 30, 2025. For the year ended March 31, 2026, consolidated revenue from operations was INR 54,364 crore.

Quick commerce expansion. The quick commerce segment revenue grew to INR 15,664 crore in the quarter ended June 30, 2026, from INR 13,232 crore in the prior quarter and INR 2,400 crore in the quarter ended June 30, 2025. Segment results turned positive at INR 365 crore, compared to INR 265 crore in the prior quarter and a loss of INR 42 crore in the quarter ended June 30, 2025. This growth reflects the transition from a marketplace model to a combination of marketplace and inventory-led model, which began in the quarter ended June 30, 2025.

India food ordering and delivery. Revenue increased to INR 3,100 crore in the quarter ended June 30, 2026, from INR 2,737 crore in the prior quarter and INR 2,261 crore in the quarter ended June 30, 2025. Segment results improved to INR 621 crore from INR 549 crore and INR 465 crore, respectively.

Hyperpure supplies. Revenue was INR 1,034 crore in the quarter ended June 30, 2026, compared to INR 978 crore in the prior quarter and INR 2,295 crore in the quarter ended June 30, 2025. The year-on-year reduction reflects the shift in quick commerce to direct sales, which reduced sales of Hyperpure supplies. Segment results were positive at INR 14 crore, compared to INR 13 crore and a loss of INR 5 crore, respectively.

Going Out. Revenue increased to INR 318 crore in the quarter ended June 30, 2026, from INR 277 crore in the prior quarter and INR 207 crore in the quarter ended June 30, 2025.

Profitability. Consolidated profit before tax was INR 272 crore in the quarter ended June 30, 2026, compared to INR 228 crore in the prior quarter and INR 88 crore in the quarter ended June 30, 2025. Profit for the period was INR 92 crore, compared to INR 174 crore and INR 25 crore, respectively. For the year ended March 31, 2026, profit before tax was INR 615 crore and profit for the year was INR 366 crore.

Standalone performance. Standalone revenue from operations was INR 3,349 crore in the quarter ended June 30, 2026, compared to INR 2,953 crore in the prior quarter and INR 2,413 crore in the quarter ended June 30, 2025. Standalone profit before tax was INR 780 crore, compared to INR 774 crore and INR 681 crore, respectively. Standalone profit for the period was INR 585 crore, compared to INR 705 crore and INR 602 crore, respectively.

Internal restructuring. The board approved a business transfer agreement between Eternal and Carthero Technologies Private Limited, a wholly owned subsidiary, for transfer of the Nugget Business (operating as “Nugget by Zomato”) by way of slump sale on a going concern basis. The Nugget Business had revenue of INR 7.20 crore for FY2025-26, representing 0.07% of standalone revenue, and net worth of INR 10.54 crore as on March 31, 2026, representing 0.03% of standalone net worth. Cash consideration is INR 35 crore, subject to adjustments. The transaction is at arm’s length and part of an internal restructuring exercise to streamline corporate structure. CTPL will carry on the business of a B2B AI-driven support platform. Expected completion is within 30 days of execution.

ESG rating. CRISIL ESG Ratings & Analytics Limited assigned a rating of ‘Crisil ESG 72’ and a Core ESG rating of ‘Crisil Core ESG 74’ to Eternal Limited for the financial year 2026.

Investor engagement. Eternal Limited is participating in the Jefferies India Forum 2026 on September 17, 2026, conducting one-on-one and/or group meetings physically at Gurugram. The schedule may be subject to change due to exigencies on the part of the investors or the Company.

3. Key Risks

GST liability risk: Outstanding demands and notices totaling approximately INR 447 crore across various periods and states, with potential additional interest and penalties. The ultimate outcome depends on disposal of the matters.
Regulatory transition risk: Labour Codes and state-level gig worker legislation, including the Karnataka Act currently being contested, could impose additional obligations. The financial impact of provisions not yet notified will be assessed upon notification.
Subsidiary performance risk: Certain subsidiaries have incurred losses for brand building and market share, and the parent has committed to provide support if they cannot meet liabilities. No impairment was recognized as on June 30, 2026.
Segment concentration risk: Quick commerce accounted for INR 15,664 crore of the INR 20,211 crore consolidated revenue in the quarter ended June 30, 2026.
Unreviewed financial information risk: The consolidated results include unreviewed interim financial information of 17 subsidiaries and 1 trust, reflecting a total loss after tax of INR 95 crore for the quarter ended June 30, 2026.
Related party transaction risk: The Nugget Business transfer to CTPL is a related party transaction, though at arm’s length.

4. Management Guidance Versus Observed Business Performance

Guidance on subsidiary investments. Management stated that investments in subsidiaries will generate growth and returns over a period of time, and concluded no impairment is required as on June 30, 2026. Observed performance: Certain subsidiaries continue to incur losses, and the Going Out and All Other Segments reported losses in the quarter ended June 30, 2026. The consolidated results include unreviewed subsidiary financials reflecting a total loss after tax of INR 95 crore for the quarter.

Guidance on GST matters. Management, supported by external expert advice, believes it has a strong case on merits and is contesting the orders and notices. Observed performance: The matters remain pending, and the ultimate outcome will be ascertained on disposal. The company has begun paying GST on delivery charges collected on behalf of unregistered delivery partners following the change in law effective September 22, 2025.

Guidance on labour codes. Management assessed that provisions currently in force do not have a material impact on financial results, and the operationalised Karnataka legislation does not have a material impact. Observed performance: The financial impact of remaining provisions will be assessed upon notification of relevant rules.

Guidance on restructuring. Management stated the Nugget Business transfer is part of an internal restructuring exercise to streamline corporate structure, with completion expected within 30 days of the BTA execution date of July 22, 2026. Observed performance: The transaction was approved by the board on July 22, 2026, with cash consideration of INR 35 crore subject to adjustments.

Guidance on AGM matters. The board approved convening the 16th Annual General Meeting on Wednesday, August 26, 2026, at 12:00 P.M. IST through video conferencing or other audio-video means. Observed outcome: The AGM was held on August 26, 2026, and two ordinary resolutions were successfully passed with the requisite majority — adoption of the audited standalone and consolidated financial statements for the financial year ended March 31, 2026, and re-appointment of Non-Executive Nominee Director Sanjeev Bikhchandani.

Broker Narrative

The early Sell thesis, built on quick-commerce competition, Blinkit underutilisation, and a sharp EBITDA miss, was repeatedly contradicted by positive returns; by the last report the stance had flipped to Buy. Persistent concerns were competitive discounting and discretionary-demand softness, but they were reframed as manageable risks rather than sell signals. The later bull narrative focused on QC store additions and margin-guidance hikes, rebounding food delivery NOV, reduced Going Out burn, and tighter inventory control, while the early fear of prolonged profitability uncertainty faded.

Broker Timeline

12 broker calls · 2025-05-02 to 2026-07-23

ETERNAL

Equity Metrics

September 24, 2026