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Informist, Friday, Jul. 18, 2025

 

By Rajesh Gajra

 

NEW DELHI – Eternal Ltd., formerly Zomato Ltd., will likely report an on-year fall in its bottom line for the June quarter primarily due to operating losses in its quick commerce vertical, which is its Blinkit network, as well as its dine out business. These segments make up for two of three verticals under Eternal's business-to-commerce segment with the third vertical being food delivery.

 

The top line growth, however, is seen strong compared with the year-ago quarter, on the back of doubling of Blinkit revenue, high growth in its business-to-business segment revenue, and steady increase in revenue from its food delivery vertical. The B2B segment of Eternal is through its Hyperpure network that supplies to restaurants and non-restaurant customers.

 

Blinkit will likely have driven the top line growth of the company but due to large investments in rapid store expansion in the last one year to counter increased competitive intensity, it has been registering substantial operating losses in recent quarters. At the end of March quarter, the total store count was 1,301, of which around 40% was opened in the December and March quarters.

 

The consolidated net profit of the company for the June quarter will likely be INR 1.04 billion, according to an average of estimates by seven brokerages. Excluding two outlier estimates--INR 2.75 billion by Motilal Oswal Financial Services and INR 1.80 billion by HDFC Securities--the average net profit estimate is INR 541 million, down 79% on year and up 39% sequentially. These estimates range from a low of INR 309 million by Kotak Securities and a high of INR 785 million by JM Financial Institutional Securities.

 

The consolidated revenue from operations is seen at INR 66.75 billion, according to an average of estimates by seven brokerage firms, up 59% on year and 14% on quarter. The lowest revenue estimate is INR 64.80 billion by Dolat Capital Market and the highest is INR 68.91 billion by Anand Rathi Share and Stock Brokers. The earnings before interest, tax, depreciation, and amortisation of Eternal will likely be INR 1.94 billion, according to the average of estimates by five brokerages.

 

In the March quarter, Eternal reported a 78?ll in consolidated net profit on a year-on-year basis to INR 390 million, and a 64% rise in consolidated revenue from operation to INR 58.33 billion. As per the company's investor presentation for the March quarter, the adjusted EBITDA recorded a fall of 29% on year to INR 1.65 billion. Eternal defines adjusted EBITDA after adding share-based payment expenses and removing rental payments from the consolidated EBITDA.

 

Analysts at the institutional equities division of Kotak Securities expect a 59% on-year rise in Eternal's revenue for the June quarter. The brokerage said this will be driven by a 2.1-times growth in Blinkit revenue and a couple of other reasons.

 

Blinkit revenue, in turn, will be driven by rapid store addition of the last few quarters, the brokerage said. It expects the store count to be 1,551 at the end of June quarter, which means net new stores of 250 during the quarter. A 75% growth in Hyperpure revenue and 18% increase in food delivery revenue will likely have also aided the June quarter revenue growth, according to Kotak Securities.

 

Brokerage Motilal Oswal Financial Services estimates a 2.3 times revenue growth on year for Blinkit and overall revenue increase of 62% in the June quarter. The gross order value in the company's food delivery vertical will likely have gone up 16% on year, the brokerage said.

 

The aggressive store addition by Eternal is seen leading to continued operating loss in the Blinkit vertical in the June quarter, but the loss will be lower compared with the March quarter, according to brokerage Dolat Capital Market. Kotak Securities expects EBITDA loss of INR 1.8 billion for the Blinkit business in the June quarter.

 

The company will detail its June quarter earnings Monday. Post-earnings, investors will be watching for updates from the company on its growth outlook for Blinkit and food delivery verticals in the business-to-consumer segment. Progress on Blinkit expansion plans amid competition and profitability outlook will be key factors to watch out, Dolat said in its preview note.

 

At 1402 IST, shares of Eternal were 0.8% lower at INR 257.70 on the National Stock Exchange. From 14 research reports available with Informist, there are 12 buy recommendations from analysts on the shares of the company at an average target price of INR 294, and two sell calls having target prices of INR 170 and INR 220.

 

Following are the June quarter consolidated earnings estimates for Eternal based on reports from seven brokerage firms in descending order of estimate of net profit.

 

Brokerage	Net Sales	Net Profit	EBITDA
	(In INR million)
Motilal Oswal Financial Services Ltd	68,085	2,745	2,681
HDFC Securities Ltd	66,500	1,800	2,400
JM Financial Institutional Securities Pvt Ltd	66,168	785	1,677
Nuvama Wealth Management Ltd	65,962	743	1,655
Anand Rathi Share and Stock Brokers Ltd	68,909	521	--
Dolat Capital Market Pvt Ltd	64,804	345	--
Kotak Securities (Institutional Equities)	66,822	309	1,302
Average	66,750	1,035	1,943

 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

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