Eternal Ltd. , the parent company of food delivery giant Zomato, reported a mixed bag of financial results for the first quarter. While the company's consolidated net profit saw a significant decline, revenue growth remained strong, driven by its various business segments.

Profit Decline

Eternal Ltd. reported a consolidated net profit of ₹25.00 crore for the quarter, marking a 36% sequential decline from the previous quarter. This figure fell short of analyst estimates, which had projected a profit of ₹106.80 crore for the quarter.

Revenue Growth

Despite the profit dip, the company's revenue from operations showed robust growth:

• Consolidated revenue increased by 23% to ₹7,167.00 crore, up from ₹5,833.00 crore in the previous quarter.
• On a year-over-year basis, revenue grew by an impressive 70% from ₹4,206.00 crore in the same quarter of the previous fiscal year.

Segment Performance

The company's performance across its various business segments was as follows:

EBITDA and Margins

Eternal Ltd.'s adjusted EBITDA rose by 60% to ₹115.00 crore. However, the adjusted EBITDA margin as a percentage of Gross Order Value (GOV) declined from 1.2% in the previous quarter to 1% in the current quarter.

Quick Commerce Growth

The quick commerce segment, which includes Blinkit, showed significant growth:

• Quick commerce NOV (Net Order Value) exceeded food delivery NOV for the first time in a full quarter.
• The segment is now the largest B2C business, contributing to almost half of the annualized NOV.
• On an annualized basis, Eternal's B2C businesses are approaching $10 billion in annual NOV.

New Initiatives

Eternal Ltd. announced the incorporation of Blinkit Foods, a new wholly-owned subsidiary with an authorized share capital of ₹1.00 crore and a paid-up capital of ₹10.00 lakh. This new entity will engage in food services, including innovation, preparation, sourcing, sale, and delivery of food to customers.

Market Response

Despite the profit decline, Eternal's share price gained 4% following the results announcement, indicating that investors may be focusing on the company's strong revenue growth and expansion in the quick commerce segment.

Management Commentary

Deepinder Goyal, CEO of Eternal Ltd., commented on the results: "We are excited about the growth in our quick commerce business, which has now become our largest B2C segment. While profitability saw a temporary dip, we believe our investments in growth will yield strong returns in the coming quarters."

The company remains focused on expanding its market share across its various business segments, with a particular emphasis on the rapidly growing quick commerce sector.

Eternal Limited (formerly known as Zomato) has reported a significant revenue surge in the first quarter, with its quick commerce business outpacing food delivery for the first time. The company's consolidated revenue from operations jumped 67% year-over-year to Rs 7,167.00 crore for the quarter ended June 30.

Quick Commerce Takes the Lead

Eternal's quick commerce segment, which includes its Blinkit platform, emerged as the star performer. For the first time, quick commerce net order value (NOV) exceeded that of food delivery for a full quarter. The segment's revenue soared by 155% year-over-year to Rs 2,400.00 crore, marking a substantial 40% quarter-on-quarter growth.

Food Delivery Maintains Steady Growth

Despite being overtaken by quick commerce, the food delivery business continued to show resilience. The India food ordering and delivery segment posted revenue of Rs 2,261.00 crore, up 16% from the previous year. The company reported that its food delivery Adjusted EBITDA margin improved to 5.0% of NOV from 3.9% a year ago.

B2B Business and Going-Out Segment

Hyperpure, Eternal's B2B supplies business, saw significant growth with revenue increasing by 89% year-over-year to Rs 2,295.00 crore. However, the company warned of potential de-growth in this segment in upcoming quarters due to changes in its business model.

The Going-out segment, which includes dining-out and entertainment ticketing, generated revenue of Rs 207.00 crore. This relatively new addition to Eternal's portfolio is showing promise, with the company projecting it could scale to $3 billion in annual topline with $150 million of Adjusted EBITDA over the next five years.

Profitability and Future Outlook

Despite the strong revenue growth, Eternal's consolidated profit after tax remained modest at Rs 25.00 crore. The company attributed this to ongoing investments in its quick commerce and going-out segments.

Eternal's CEO, Deepinder Goyal, commented on the results: "We are excited about where we have gotten to in this business, and the journey that lies ahead. Our average revenue per order today is INR 160+, which is meaningfully higher than our food delivery and quick commerce businesses."

Strategic Shifts and Innovations

The company announced it is transitioning its quick commerce segment from a pure marketplace model to a combination of marketplace and inventory-led model. This shift is expected to provide more control over inventory and potentially lead to margin expansion.

Eternal also revealed plans to invest in scaling up new initiatives, including Bistro (a 10-minute food delivery service) and Greening India (a large-scale agroforestry initiative).

As Eternal continues to diversify its operations and invest in growth, investors will be watching closely to see how these strategic moves translate into long-term profitability and market leadership across its various segments.