Eternal Ltd Management Discussions

Note: Sharp increase in FY26 revenue from operations mainly due to shift to inventory ownership in quick commerce from Q1FY2B onwards, where revenue now also includes the full monetary value of goods sold (and not just the marketplace commission).

Consolidated statement of profit and loss

Income

Consolidated revenue from operations increased 169% YoY to INR 54,364 crore in FY26. The sharp increase was primarily driven by the shift to inventory ownership in the quick commerce business where revenue now includes the full monetary value of goods sold (and not just the marketplace commission).

a) Food delivery revenue from operations grew 26% YoY to INR 10,159 crore in FY26, primarily driven by higher order volumes and increase in revenue per order. Revenue per order increased due to higher commission income, increase in platform fee and better ad monetization. Platform fee grew faster than food delivery revenue due to increase in average platform fee per order in FY26 compared to FY25.

(Note: Food delivery revenue as per the financial statements is different from the food delivery Adjusted Revenue that we have presented on prior pages of this report as that also includes the customer delivery charges that we collect on behalf of delivery partners from customers (net of any discounts, including free delivery discounts on account of Zomato Gold program) and platform fee and other charges paid by the customers on food delivery orders that are not already included in revenue from operations. Adjusted Revenue is a metric tracked by the management to analyse the business performance. Refer page 49 for the reconciliation between consolidated Adjusted Revenue and revenue from operations.)

b) Quick commerce revenue grew 626% YoY to INR 37,779 crore in FY26 primarily driven by shift to inventory ownership in quick commerce from Q1FY26 onwards, where revenue now also includes the full monetary value of goods sold (and not just the marketplace commission). On a like-for-like basis, quick commerce revenue grew 144% YoY.

c) Going-out revenue grew 32% YoY to INR 973 crore in FY26 driven by growth across all categories including dining-out, movies and events. FY26 was also the first full financial year post acquisition of entertainment ticketing business in FY25.

d) Hyperpure revenue declined 13% YoY to INR 5,366 crore in FY26, driven by scale down of the nonrestaurant business following the shift to inventory ownership in quick commerce. The core restaurant supplies business grew 38% YoY in FY26, driven primarily by an increase in the number of restaurant outlets served.

Other income increased by INR 319 crore to INR 1,396 crore in FY26, primarily driven by higher treasury income. While the closing cash balance declined YoY in FY26 on account of capex and NWC investments in the quick commerce business, the average investable cash balance remained higher than FY25 as the QIP proceeds received in November 2024 were available for the full year(versus only part of FY25). Treasury yields remained broadly stable YoY.

Expense

Cost of goods sold (COGS) increased by 442% YoY to INR 30,167 crore in FY26 primarily due to shift to inventory ownership in our quick commerce business.

Employee benefits expense increased 38% YoY to INR 3,536 crore in FY26. This primarily includes salaries, wages, bonuses and share-based compensation paid to our on-roll employees across all our businesses. Increase in expense was largely driven by higher salaries & wages, which grew YoY due to (i) impact of annual increments, (ii)33% YoY increase in headcount to 22,470 in FY26 and (iii)full-year impact of consolidation of employees onboarded as part of the acquisition of the entertainment ticketing business in FY25. Increase in headcount was largely due to team expansion in the quick commerce and going-out business segments. Share-based payment expense grew 3% YoY to INR 819 crore in FY26.

Finance costs increased 155% YoY to INR 392 crore in FY26. This primarily includes interest on lease liabilities recorded under Ind AS 116 which increased YoY due to the expansion in store and warehouse network in the quick commerce business.

Depreciation and amortisation expenses grew 85% YoY to INR 1,597 crore in FY26. This includes (i) depreciation on fixed assets, (ii) depreciation as recorded under Ind AS 116 and (iii) amortisation of intangible assets. Increase in expense was primarily driven by higher depreciation on fixed assets and under Ind AS 116 due to the continued expansion of store and warehouse network in the quick commerce business. Amortisation expense increased 7% YoY due to the full year impact of amortisation of intangible assets created due to the acquisition of the entertainment ticketing business in FY25.

Other expenses

Delivery and related charges increased 58% YoY in FY26 to INR 9,065 crore. This includes (i) payouts¹ to delivery partners for last mile deliveries, (ii) delivery partner support cost and (iii) cost of consumables issued to delivery partners at the time of onboarding. Increase in expense was largely due to increase in delivery partner payouts in the food delivery and quick commerce businesses due to the growth in order volumes. Delivery partner support cost and cost of consumables also increased YoY due to increase in overall order volumes and delivery partners on the platform.

Advertisement and sales promotion expenses increased 70% YoY to INR 3,350 crore in FY26. This includes

(i) platform funded subsidies (to the extent not netted off from revenue), (ii) marketing & branding costs, (iii) customer appeasement costs and, (iv) refunds across our business operations. Increase in expense was primarily driven by higher marketing & branding costs and promotional spends. Marketing and branding costs increased primarily due to growth investments in the quick commerce and going-out business, including higher digital marketing spends to drive customer growth. Promotional spends increased primarily due to investments in targeted activation of price sensitive customer cohorts in the food delivery business and driving customer acquisition and engagement in the going-out business, including the launch of District Pass.

IT support services, server and communication costs increased 69% YoY to INR 1,091 crore in FY26. This primarily includes server hire charges, software subscription cost and communication costs incurred for our consolidated operations. Increase in expense was primarily driven by higher cloud computing costs due to increase in order/ transaction volumes across our B2C businesses.

Outsourced support cost increased 98% YoY to INR 1,131 crore in FY26. This primarily includes costs related to (i) store and warehouse related off-roll manpower costs in our quick commerce operations and (ii) support costs across our consolidated operations. Increase in expense was largely driven by increase in off-roll manpower deployed across stores in the quick commerce business. Support cost decreased YoY as we scaled Nugget.

Payment gateway charges increased 25% YoY to INR 285 crore in FY26 primarily driven by increase in NOV transacted across our B2C platforms.

Others expense increased 94% YoY to INR 4,531 crore in FY26. This primarily includes quick commerce warehouse management & associated logistics cost, rental expenses, legal & professional fee, general & admin expenses, insurance cost, amongst others. Increase in expense was largely driven by increase in costs associated with our quick commerce business including rentals & utilities, warehouse management expenses, freight and logistics expense (excluding last mile cost) and others. Part of the increase was also due to growth in live event costs (e.g., artist and venue booking) in case of events co-produced, managed and marketed by the Company. Other expenses such as legal & professional fee, G&A expenses also grew YoY.

Additional notes: Adjusted Revenue and Adjusted EBITDA reconciliation