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, and total comprehensive income reached ₹266 crore.

• Margin expansion continues in food delivery, with a focus on sustainable growth and platform health rather than targeting a specific margin timeline.

• 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.

• The company is launching 'District' as a separate app and brand, leveraging existing app traffic to optimize customer acquisition costs.

Financial highlights

• Food delivery GOV growth remains robust at 27%-28% YoY, with order volume as the primary driver and a stable average order value.

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

• CapEx increased quarter-over-quarter, primarily due to Blinkit store expansion and some warehousing capacity growth for Hyperpure.

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

• Contribution margins in food delivery were slightly lower this quarter due to external factors like elections and heat waves, but adjusted EBITDA margin is expected to continue improving.

Outlook and guidance

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

• Margin expansion in food delivery is anticipated to continue, with no fixed timeline but confidence in reaching 4%-5% margins in the coming quarters.

• Quick commerce business is expected to remain profitable despite aggressive store expansion, with long-term margins potentially matching or exceeding food delivery.

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