As India grapples with localised LPG shortages impacting restaurant kitchens in parts of the country, investors raised a pointed question to Eternal Limited’s management during the Q4 FY26 earnings call — will the shortage dent food delivery growth and profitability in Q1 FY27?
The answer from Deepinder Goyal was measured but reassuring. “No meaningful impact yet,” he said, explaining that when localised supply disruptions happen — whether from LPG shortages, weather or any other factor — demand typically redistributes across the platform rather than disappearing entirely. The breadth of restaurant selection across cuisines, price points and geographies means customers have alternatives within the app. “Some restaurants in affected pockets did see temporary disruption, but platform-level throughput wasn’t impacted,” he added.
The food delivery growth story — structural, not transient
The shareholder letter addressed a broader question on what is driving the consistent acceleration in food delivery net order value growth over the last three quarters after bottoming out in Q1 FY26. Deepinder attributed the improvement to deliberate interventions to expand the addressable market into more price-sensitive segments.
The key move was lowering the minimum order value for free delivery to Rs 99 from Rs 199 for Gold members, along with targeted activation for budget-conscious customers and curated assortment specifically for this segment — meals under Rs 250. The results, he said, have been encouraging, with order volume growth driven by new-to-platform customers and higher frequency among existing budget-conscious customers.
Crucially, the company is not chasing this growth at the cost of economics. Revenue per order continues to improve and operating cost efficiencies have kept pace, which is why margins have remained stable even as the order mix has shifted toward lower-value orders. “We are optimising for absolute Adjusted EBITDA and not percent,” Deepinder said. Management guided for long-term 20%+ year-on-year NOV growth with margins remaining in the 5-6% range.
Going Out — lumpy but on track
On the District app’s Going Out segment, CFO Akshant Goyal flagged that the 47% year-on-year NOV growth in the latest quarter versus 20% in the prior year should be read with caution given the inherent lumpiness of the business — Q3 is events-heavy, Q1 is IPL-heavy, and movies NOV depends entirely on the release calendar. Quarter-to-quarter swings are large and not indicative of underlying momentum. For full year FY26, Going Out NOV grew 42% year-on-year, and management reiterated its guidance of $3 billion in NOV and $150 million in Adjusted EBITDA by FY30, implying approximately 30%+ year-on-year NOV growth from here.
Cash position
Cash balance at the end of Q4 FY26 increased to Rs 17,972 crore from Rs 17,820 crore in Q3 FY26. Akshant flagged two items — net working capital decreased sequentially due to settlements with sellers following the transition to the first-party model in quick commerce, and the negative cash movement in other items largely reflected mark-to-market adjustments on debt securities held by the company due to lower bond prices in an uncertain macro environment. He clarified these are not realised losses and do not impact treasury returns as Eternal intends to hold these bonds to maturity.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making investment decisions.