Eternal (ETERNAL) Q1 24/25 earnings summary

Executive summary

• Food delivery and quick commerce businesses reported strong year-over-year and sequential growth, with food delivery GOV trending at 27%-28% YoY and consolidated revenue from operations for Q1 FY25 at ₹4,206 crore, up from ₹2,416 crore in Q1 FY24.

• Net profit for the quarter was ₹253 crore, compared to a net loss of ₹15 crore in Q1 FY24, with total comprehensive income reaching ₹266 crore.

• Margin expansion continues in food delivery, with a target range of 4%-5% in sight within a few quarters, while maintaining investments in growth and platform health.

• Quick commerce (Blinkit) is scaling rapidly, with plans to reach 2,000 dark stores by March 2026 and management confident in long-term profitability comparable to food delivery.

• Management remains confident in long-term growth prospects, with continued investments in core and emerging segments.

Financial highlights

• Food delivery take rates improved quarter-over-quarter, though contribution margins were slightly lower due to factors like elections and heat waves, expected to normalize.

• CapEx increased this quarter, primarily driven by Blinkit store expansion and some warehousing for Hyperpure.

• Working capital release of INR 175 crore attributed to calendar effects and Hyperpure business growth.

• Earnings per share (EPS) for Q1 FY25 stood at ₹0.29 (basic), compared to ₹0.00 in Q1 FY24.

• Total expenses for the quarter were ₹3,915 crore, up from ₹2,612 crore in Q1 FY24.

Outlook and guidance

• Management expects food delivery GOV growth to remain above 20% YoY, with potential to sustain higher rates if current trends continue.

• Margin expansion in food delivery is expected to continue, with adjusted EBITDA margins projected to improve.

• Quick commerce business is expected to remain profitable despite aggressive store expansion and competition.

• Management remains confident in the long-term growth prospects, with continued investments in core and emerging segments.