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Informist, Tuesday, Apr. 29, 2025

 

By Rajesh Gajra

 

NEW DELHI – Continuing investments and operating expenditure in its quick delivery Blinkit business due to the rapid expansion of stores will drag down Eternal Ltd.'s bottom line in Jan-Mar. This will be the third consecutive quarter that the net profit of Eternal, formerly Zomato Ltd., will be contracting on a year-on-year basis. Eternal changed the name of the company in March, though the brand and app continue to be called Zomato.

 

Eternal will likely report a consolidated net profit of INR 328 million in the March quarter, down 81% on year and 44% on quarter, according to an average of estimates by nine brokerages. The consolidated revenue from operations is seen increasing 65% on year and 9% sequentially to INR 58.76 billion during the quarter.

 

The estimates for profit range from a net loss of INR 771 million by ICICI Securities to a net profit of INR 1.81 billion by Motilal Oswal Financial Services. The revenue estimates range from INR 56.77 billion by Kotak Securities' institutional to INR 63.65 billion by ICICI Securities.

 

Analysts see the rapid addition of new stores in the March quarter and the previous couple of quarters will lead to a surge in gross order value and adjusted revenue for the Blinkit segment. While Blinkit's contribution to revenue growth is seen increasing, other segments like food delivery and business-to-business are expected to deliver similar growth as in the December quarter.

 

The profitability in the March quarter will be hit by the rapid expansion of Blinkit stores. Kotak Securities' institutional equities division estimates the total Blinkit store count to rise to 1,227 at the end of the March quarter from 1,007 stores at the end of December. Eternal added 216 Blinkit stores in the December quarter and 152 stores in the September quarter.

 

The company's earnings before interest, tax, depreciation, and amortisation for the March quarter is seen at INR 844 million according to an average of estimates by seven brokerages.

 

In the December quarter, the company's consolidated net profit fell 57% on year and 66% on quarter to INR 590 million, while its revenue from operations increased 64% on year and 12.6% sequentially to INR 54.05 billion. The company's adjusted revenue in the December quarter was INR 57.46 billion, up 58% on year. During the December quarter, the food delivery segment recorded an adjusted revenue of INR 24.13 billion, up 17% on year. The quick commerce or Blinkit segment saw the adjusted revenue surge 2.2 times to INR 13.99 billion, while the B2B supplies or Hyperpure segment's adjusted revenue rose 95% to INR 16.71 billion.

 

Kotak expects Eternal's revenue growth in the March quarter to come in at 59% on year, driven by 19% growth in food delivery revenue, 84% growth in Hyperpure revenue, and 103% growth in Blinkit revenue. ICICI Securities said the March quarter will likely be the bottom for the profitability of the quick commerce segment of Eternal, and the outlook will improve from the June quarter onwards as the newly added Blinkit stores scale up.

 

According to Kotak, the Blinkit segment will report an EBITDA loss of INR 2.50 billion as new stores will offset the higher profitability of older stores. Eternal had reported an EBITDA loss of 1.03 billion in the December quarter.

 

The company will detail its March quarter earnings on Thursday. Investors and analysts will look out for the management's commentary on the outlook for Blinkit, the food delivery segment's gross order value growth, and margins for the three segments.

 

On Tuesday, shares of Eternal ended 1.7% up at INR 231.11 on the National Stock Exchange of India.

 

Following are the Jan-Mar consolidated earnings estimates for Eternal based on reports from nine brokerage firms in descending order of net profit estimates:

 

Brokerage firm	Net Sales	Net Profit	EBITDA
	(In INR million)
Motilal Oswal Financial Services Ltd	58,521	1,813	1,730
Anand Rathi Share and Stock Brokers Ltd	58,328	1,356	---
Elara Securities (India) Pvt Ltd	59,435	493	972
Equirus Securities Pvt Ltd	58,568	367	650
Kotak Institutional Equities	56,766	297	487
JM Financial Institutional Securities Pvt Ltd	57,210	7	623
Emkay Global Financial Services Ltd	57,134	-246	770
Nuvama Wealth Management Ltd	59,213	-361	673
ICICI Securities Ltd	63,652	-771	---
Average	58,759	328	844

 

End

 

Edited by Saji George Titus

 

 

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