Eternal Q2 Results: Revenue nearly triples but profit drops over 60%; Margin narrows

Shares of Eternal Ltd. parent company of food delivery aggregator Zomato and quick commerce player Blinkit, are trading at record high levels ahead of its results that will be reported on Thursday, October 16.

A CNBC-TV18 poll is expecting Eternal's net profit to decline by 21% from last year to 139 crore, while its revenue is likely to grow by 66% on a year-on-year basis to ₹7,963 crore.

Eternal's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) is likely to increase by 13% on a year-on-year basis, but margins may narrow by 150 basis points to 3.2% from 4.7% last year, according to the CNBC-TV18 poll.

Gross Order Value for the Food Delivery business is likely to grow between 18% to 19% from last year, while that for Blinkit is likely to be between 130% to 140% from the year-ago quarter.

Store expansion in Blinkit is likely to impact the operating performance, thereby impacting margins. Store count at the end of the quarter is seen between 1,775 to 1,800, compared to 1,544, at the end of the June quarter.

At the end of the June quarter, Eternal had highlighted that the year-on-year growth as made a bottom, as have the quick commerce margins for the near-term. The company also announced that Blinkit will now have its own inventory compared to third-party sales, which could aid margins by one percentage point.

Shares of Eternal are trading 1.2% higher ahead of the results announcement at ₹358.5. At the day's high, the stock was at ₹360, which is a 9x jump from its all-time low of ₹40, which it fell to on July 27, 2022.