Zomato-parent Eternal Ltd.'s net profit nearly doubled in the third quarter of the current financial year, even as it missed street expectations. Margin improvement came from supply chain cost efficiencies, a favourable shift towards long tail categories and operating leverage, the company said.
Consolidated net profit jumped to Rs 102 crore in the October-December period, compared to Rs 59 crore in the corresponding quarter last year, according to a stock exchange filing. Analysts' consensus estimates compiled by Bloomberg projected Rs 115 crore.
Eternal Q3 Results (Consolidated, YoY)
- Revenue Rs 16,315 crore vs Rs 5405 crore (Bloomberg estimate: Rs 16,224 crore)
- Ebitda Rs 368 crore vs Rs 162 crore (Estimate: Rs 333 crore)
- Margin at 2.3% vs 3% (Estimate: 2.1%)
- Profit at Rs 102 crore vs Rs 59 crore (Estimate: Rs 115 crore)
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"The shift to own inventory also continues to be margin accretive including in the previous quarter. So far, we have banked more than half of the 1% point margin accretion that we expect as a result of this change," said CFO Akshant Goyal.
"The fact that we landed on the positive side was not the result of a last-minute push or a cost-cutting exercise. Breakeven happened as a consequence of those choices - not as a goal. That gives me confidence in our business model," said founder Deepinder Goyal.
Segment Highlights
Food delivery's net order value jumped 16.6% year-on-year, a second consecutive quarter of NOV growth acceleration. On the margin front, adjusted Ebitda margin (as a % of NOV) reached an all-time high of 5.4% and the business delivered an absolute adjusted operating income of Rs 531 crore for the quarter
The quick commerce and hyperpure business turned adjusted Ebitda profitable in Q3 with Rs 4 crore, improving significantly from a loss of Rs 156 crore in the previous quarter. The NOV growth for quick commerce was 121% YoY, despite GST changes and seasonality. The business added 211 net new stores in the December quarter, taking the total store count to 2,027.
Shares of Eternal settled 5% higher at Rs 283.40 on the BSE, ahead of the results, compared to 0.3% decline in the benchmark Sensex. The stock is up 32% on a 12-month basis.
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