Eternal expands operating margin, but other income drives profit quality concerns
Revenue growth outpaced expenses in both comparisons, while other income exceeded pre-tax profit and the stock gave up most of its opening gain.
Filed 28 Apr 2026, 20:11 IST · after market close · Eternal Ltd (ETERNAL)
Key takeaways
- Consolidated revenue grew 196.45% year on year, while expenses rose 191.72%, lifting operating margin by 1.58 percentage points.
- Net profit rose 346.15% year on year to Rs 174 cr, but other income equalled 150.00% of pre-tax profit and the tax rate fell 36.11 percentage points.
- The stock closed 0.38% higher after a 4.04% opening gap, an ordinary close move against its 3.60% median post-results move.
Price around the results
Revenue growth widened the operating base
Eternal's consolidated revenue grew 196.45% year on year and 5.99% sequentially, with expenses growing more slowly in both comparisons. That lifted operating margin by 1.58 percentage points year on year and 0.55 percentage points from Q3FY26. The quarter also marked a rise in margin from 1.23% in Q4FY25 to 2.81% now, continuing the improvement seen across the last four reported quarters.
Profit growth was helped by tax and non-operating income
Net profit increased 346.15% year on year and 70.59% sequentially, but the quality of that increase was mixed. Other income of Rs 342 cr represented 150.00% of pre-tax profit, while interest expense rose 135.71% year on year and 23.36% sequentially. The tax rate fell to 23.68%, down 36.11 percentage points year on year and 16.32 percentage points sequentially, also supporting net profit.
Margin improved but remained near the sector's lower end
Eternal's 2.81% operating margin was 12.00 percentage points below the 14.81% median for the 93 Consumer Discretionary peers that had reported, placing it sixth from the bottom. The direction is better than the prior year: margin rose from 1.23% in Q4FY25 to 1.60%, 1.76%, 2.26% and 2.81% over the subsequent quarters. The comparison therefore shows sequential operating improvement, but a large gap to sector profitability.
The opening market reaction did not hold
The stock opened 4.04% higher after the results but closed up only 0.38%, then fell 2.39% on the next session. It was up 1.72% after five sessions, before reaching declines of 4.35% after 15 sessions and 3.66% after 30 sessions. Across eight prior results, reactions were evenly split between four rises and four falls, with a median absolute move of 3.60%, making the first-day close ordinary despite the larger opening gap.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹17,292 cr | ₹16,315 cr | +5.99% | +196.45% |
| Other income | ₹342 cr | ₹348 cr | -1.72% | -7.07% |
| Expenses | ₹16,806 cr | ₹15,947 cr | +5.39% | +191.72% |
| Operating profit | ₹486 cr | ₹368 cr | +32.07% | +575.00% |
| Operating margin (%) | 2.81% | 2.26% | — | — |
| Interest | ₹132 cr | ₹107 cr | +23.36% | +135.71% |
| Depreciation | ₹468 cr | ₹439 cr | +6.61% | +63.07% |
| Profit before tax | ₹228 cr | ₹170 cr | +34.12% | +135.05% |
| Tax | ₹54 cr | ₹68 cr | -20.59% | -6.90% |
| Net profit | ₹174 cr | ₹102 cr | +70.59% | +346.15% |
| EPS (₹) | ₹0.19 | ₹0.11 | +72.73% | +375.00% |
Operating margin of 2.81% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.38% | -0.38% |
| Next session | -2.39% | — |
| 5 sessions | +1.72% | +0.34% |
| 15 sessions | -4.35% | — |
| 30 sessions | -3.66% | — |
Volume on the results session was 3.36× its 20-day average.
What to watch
- Whether consolidated operating margin holds above 2.81% after four consecutive quarters of improvement.
- Whether other income remains below the 150.00% share of pre-tax profit recorded this quarter.
- Whether the 12.00-percentage-point gap to the 14.81% sector median narrows.