Eternal Q2 Result Review: Brokerages Split On Zomato Parent Post Q2 Beat; Revenue Triples, Profit Slumps
Eternal’s Q2 revenue surged nearly threefold to Rs 13,590 crore, beating analyst estimates, but net profit fell 63% year-on-year to Rs 65 crore due to higher inventory costs.
Brokerages are mixed on Eternal Ltd., the parent company of Zomato, following its September quarter earnings. While Bank of America and UBS reiterated their bullish stance citing strong revenue growth and positive guidance, Macquarie remained cautious, flagging concerns over profitability and competitive pressures. Eternal’s Q2 revenue surged nearly threefold to Rs 13,590 crore, beating analyst estimates, but net profit fell 63% year-on-year to Rs 65 crore due to higher inventory costs.
Eternal Q2FY26 Results (Consolidated, YoY)
Revenue at Rs 13,590 crore versus Rs 4,799 crore (Bloomberg estimate: Rs 8,665 crore)
EBITDA up 5.8% at Rs 239 crore versus Rs 226 crore (Estimate: Rs 236 crore)
Margin at 1.8% versus 4.7% (Estimate: 2.7%)
Profit down 63% at Rs 65 crore versus Rs 176 crore (Estimate: Rs 108 crore)
BofA On Eternal
Reiterate Buy with target price of Rs 400
Believe commentary from con-call was positive
Believe QC losses slightly higher than most investor expectations
Management expects to get to 2,100 stores by Dec'25 vs 2,000 earlier
Consider this prudent strategy when competition not adding dark stores
Reiterates Buy on favorable risk-reward
UBS On Eternal
Maintain Buy with target price of Rs 400
Strong numbers with positive guidance across segments
QC NOV growth expected to be 100% for next 1-2 years
Focus remains on growth, not immediate Ebitda breakeven
NOV growth expected around 30% YoY
Margins set to improve and losses to remain range-bound near term
Macquaire On Eternal
Maintain Underperform with target price of 200
Painted optimistic yet measured outlook in Sept-Q earnings call
Constructive on TAM potential, but the face of rising competitive intensity
Believe consensus overstates the turnaround and sustainability of profitability
Fundamentals don't support US$40bn market cap (120x FY28 EV-Ebitda)
Emkay On Eternal
Maintain Buy with revised target price of Rs 430 versus Rs 330 earlier
Better-than-expected revenue growth with,
Strong NOV growth in Quick Commerce
Accelerated shift to owned inventory model
Weaker QCom Ebitda offset stronger food delivery Ebitda
Increase NOV growth expectations, while keeping long-term QCom margins at 5%
Believe Blinkit well placed to capitalize on large long-term QCom opportunity
Stock trades at expensive valuations (50 times FY28E EV/Ebitda)
As QCom business still logging suboptimal profitability
Nuvama On Eternal
Retain Buy with revised target price of Rs 400 versus Rs 320 earlier
Healthy quarter with revenue above consensus estimate
Ebitda margin at 1.8% was below consensus estimate of 2.7%
Quick commerce losses reduction lower than expected due to higher marketing exp
Tweaking FY26E/27E by -57%/-9% due to lower margin expectations in near team
Management expects growth at 100% CAGR in Blinkit for next two year
