Eternal Ltd.'s September-quarter revenue and net profit rose sharply year on year, but earnings fell short of analyst estimates as EBITDA and margins missed expectations. Brokerages remained positive on the growth outlook for its quick commerce business Blinkit, after management raised its dark-store target to more than 3,500 by March 2027 from 3,000 earlier. UBS, Jefferies and JPMorgan retained positive ratings, with Jefferies and JPMorgan raising their target prices. Macquarie maintained Underperform, citing valuation concerns despite strong execution.
Consolidated revenue rose 77.6% year on year to Rs 24,138 crore, ahead of the estimated Rs 23,447 crore. Net profit increased 92.3% to Rs 125 crore, missing the estimate of Rs 304 crore, while EBITDA came in at Rs 752 crore against expectations of Rs 776 crore. The EBITDA margin was 3.1%, below the estimated 3.3%, although it improved from 1.8% a year earlier.
Blinkit's net order value grew 79%, while revenue from the quick commerce business rose 94% to Rs 19,152 crore. Food delivery revenue increased 37% to Rs 3,396 crore, with net order value growth of 21%. Management raised its dark-store target to more than 3,500 by March 2027 and plans to reach 5,000 stores by March 2028. Brokerages expect store additions and quick commerce growth to accelerate, while tracking the balance between reinvestment, margins and competition.
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Eternal Q2 Highlights (YoY)
- Consolidated revenue rose 77.6% year on year to Rs 24,138 crore from Rs 13,590 crore, ahead of the estimate of Rs 23,447 crore.
- Net profit increased 92.3% year on year to Rs 125 crore from Rs 65 crore, below the estimate of Rs 304 crore.
- EBITDA stood at Rs 752 crore, compared with Rs 239 crore a year earlier and the estimate of Rs 776 crore.
- EBITDA margin improved to 3.1% from 1.8% a year earlier, below the estimated 3.3%.
- Quick commerce revenue rose 94% year on year to Rs 19,152 crore, with net order value growth of 79%.
- Food delivery revenue increased 37% year on year to Rs 3,396 crore, with net order value growth of 21%.
- Hyperpure reported adjusted EBITDA of Rs 10 crore, compared with a loss of Rs 5 crore a year earlier.
Here's what brokerages are saying after Eternal announced Q2 results:
Macquarie
- Maintained 'Underperform'; Target Price At Rs 225
- Said execution remained strong.
- Noted that management raised its dark-store guidance to more than 3,500 by March 2027 from 3,000 earlier.
- Said adjusted EBITDA margin moderated due to reinvestment.
- Highlighted consistent execution as supportive of consensus expectations.
- Prefers Eternal over Swiggy but retained Underperform, citing valuation concerns and expectations already priced into the stock.
UBS
- Maintained 'Buy'; Target Price At Rs 390
- Said Q2 quick commerce performance beat estimates and store targets were raised.
- Noted that food delivery margins were flattening out.
- Said management sounded confident about competition in quick delivery.
- Expects dark-store additions and growth to accelerate in the coming quarters.
Jefferies
- Maintained 'Buy'; Target Price Raised To Rs 430 From Rs 415
- Said faster Blinkit store rollout was accompanied by improving economics.
- Expects food delivery growth of more than 20% and sees rising confidence in District.
- Identified AI platform dark.ai as a key monitorable beyond Q2, while noting that its outcome remained uncertain.
- Highlighted management's experimental approach and its confidence in responding to agentic commerce.
JPMorgan
- Maintained 'Overweight'; Target Price Raised To Rs 420 From Rs 390
- Said quick commerce growth was accelerating despite competition, while food delivery faced a trade-off between growth and margins.
- Expects quick commerce margins to keep rising despite aggressive store expansion.
- Said Eternal appeared confident of sustaining at least 20% year-on-year food delivery growth while keeping margins flat over the next one to two years.
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