Eternal Limited , formerly known as Zomato, has reported significant improvements across multiple business segments, with particularly strong performance in its quick commerce division. However, the company is also facing several challenges that may impact its short-term growth prospects and has decided against launching a separate budget-focused food delivery app.

Food Delivery Segment Shows Steady Growth

The company's food delivery segment demonstrated solid progress, with a 14% year-over-year growth in November. More notably, profitability in this segment reached a record high of 5.3%, up from 5.0% in the previous quarter, indicating improved operational efficiency.

Quick Commerce Sees Exceptional Growth

Eternal's quick commerce business exhibited remarkable performance:

• 137% year-over-year growth in November
• 27% quarter-over-quarter growth, marking the best performance in 10 quarters
• Expansion of network with 272 new stores added
• Gain of 3.9 million average monthly active customers

The company's transition to an inventory ownership model in quick commerce is nearing completion, with approximately 80% of November's business using its own inventory model.

Financial Metrics Show Improvement

Eternal's financial metrics demonstrated positive trends:

• Quarterly losses reduced to INR 156.00 crore from INR 162.00 crore in the previous quarter
• Adjusted EBITDA margin improved from -1.8% to -1.3% in November

Segment-wise Performance

Challenges and Headwinds

Despite the strong performance in key segments, Eternal is facing several challenges that could impact its short-term growth:

• Weaker consumer spending patterns
• Increased competition from rapid delivery services
• Unstable weather conditions affecting operations

These factors may pose obstacles to the company's growth trajectory in the near future.

No Plans for Separate Budget App

Eternal Ltd has announced it has no immediate plans to launch a separate budget-focused food delivery app, unlike competitors Swiggy Ltd and Rapido. While Swiggy operates 'Toing' in select Pune locations targeting students, and Rapido runs 'Ownly' across select Bengaluru areas, Eternal is taking a different approach.

Co-founder Deepinder Goyal stated that the company prefers maintaining a streamlined operational structure and is willing to be the last mover in this space. Instead of launching a separate app, Eternal is addressing budget-conscious consumers by reducing the minimum order value for free delivery to Rs 99 for Zomato Gold users, down from Rs 199. The company cited that launching another app would significantly increase organizational complexity.

Looking Ahead

While the significant growth in quick commerce and the improved profitability in food delivery indicate that Eternal is successfully executing its business strategy, the company will need to navigate the identified challenges effectively. The company's focus on expanding its quick commerce network and transitioning to an inventory ownership model may continue to drive growth, but the impact of external factors will need to be closely monitored.

Investors and market watchers will likely keep a close eye on how Eternal maintains its growth momentum, addresses the current headwinds, and further improves its profitability metrics across all segments. Additionally, the company's decision to forgo a separate budget app in favor of enhancing its existing offerings will be an interesting strategy to watch in the competitive food delivery market.

Eternal Limited has successfully completed the incorporation of its wholly-owned subsidiary, Eternal General Service Foundation, receiving the official certificate of incorporation from the Ministry of Corporate Affairs on December 18, 2025. This development follows the company's robust Q2 FY2026 financial performance, which showed remarkable revenue growth of 183% year-over-year.

Financial Performance Overview

The company's consolidated revenue from operations reached INR 13,590.00 crores in Q2 FY2026, compared to INR 4,799.00 crores in the same quarter last year. This substantial growth underscores the company's expanding market presence and operational efficiency.

Despite the impressive revenue growth, the company's consolidated profit for Q2 FY2026 stood at INR 65.00 crores, a decrease from INR 176.00 crores in Q2 FY2025. This decline in profit amidst revenue growth may indicate increased operational costs or strategic investments for future growth.

CSR Subsidiary Incorporation Completed

Eternal General Service Foundation has been officially incorporated as a wholly-owned subsidiary of Eternal Limited. The foundation received its certificate of incorporation on December 18, 2025, with the Corporate Identity Number U88900DL2025NPL459915. The subsidiary will focus on charitable and social welfare activities across multiple areas.

The foundation will concentrate on hunger relief, healthcare, education, and environmental sustainability initiatives, demonstrating the company's commitment to giving back to society.

Segment-wise Performance

The company's financial results reveal strong performance across various business segments, with quick commerce leading the growth trajectory.

The quick commerce segment showed exceptional growth, contributing significantly to the overall revenue increase and positioning itself as the primary growth driver for the company.

Ongoing Business Challenges

Eternal Limited continues to face GST disputes totaling INR 441.00 crores related to delivery charges. However, the management maintains confidence in their position, believing they have a strong case on merits. This regulatory challenge remains a key area of focus for the company's legal and compliance teams.

Strategic Outlook

The completion of the CSR subsidiary incorporation marks a significant milestone in Eternal Limited's corporate social responsibility journey. Combined with the company's strong revenue performance across segments, particularly in quick commerce, this development reflects the organization's commitment to balanced growth encompassing both business expansion and social impact initiatives. The foundation's establishment with dedicated focus areas positions Eternal Limited to make meaningful contributions to societal welfare while maintaining its competitive market position.