Outlook for both quick commerce and food delivery is better in H2 FY27 given the delayed festive season and management reinvesting surplus cash flows. ICICI Securities is constructive on ‘Dark.AI' given Eternal's strong capital deployment track record. Revenue in Q2 FY27 was Rs 24,140 crore (up 19.4% QoQ/77.6% YoY), in line with brokerage's estimates. Ebitda was Rs 750 crore (up 26.6% QoQ/214.6% YoY), 4.9% higher than estimates.
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ICICI Securities Report
ICICI Securities has maintained its Buy rating on Eternal Ltd. with a three-stage DCF-based unchanged target price of Rs 425, implying a potential upside of 36%, from the reports market price.
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Q2 FY27 performance review
Revenue in Q2 FY27 was Rs 24,140 crore (up 19.4% QoQ/77.6% YoY), in line with brokerage's estimates. Ebitda was Rs 750 crore (up 26.6% QoQ/214.6% YoY), 4.9% higher than estimates. Ebitda margin was 3.1% (up 18bps QoQ/136bps YoY). PAT was Rs 130 crore (up 35.9% QoQ/up 92.3% YoY) impacted by a higher tax provision, following the exhaustion of carried forward tax losses at the parent entity.
Adjusted revenue in Q2 FY27 was Rs 24,620 crore (up 19.2% QoQ/76.3% YoY). Adjusted Ebitda was Rs 670 crore (up 20% QoQ/197.3% YoY). Adj. Ebitda margin (as a % of adj. revenue) was 2.7% (up 2bps QoQ/110bps YoY).
Risks: Slowdown in discretionary spending; and negative externalities disrupting business operations.
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