📈 Eternal Limited (Formerly Zomato Ltd) Q1 FY26 Results Analysis 🚀
CMP: ₹271 | Date: July 21, 2025
1. Recent Insights & Highlights 🌟
Strong YoY Growth:
Net Order Value (NOV) for B2C businesses surged 55% YoY (16% QoQ) to ₹20,183 Cr.
For the first time, Quick Commerce NOV surpassed Food Delivery, now nearly half of B2C business.
Consolidated Adjusted Revenue:
₹7,563 Cr (+67% YoY | +22% QoQ)—sustained >50% growth for 11 quarters.
Profitability:
Adjusted EBITDA declined 42% YoY to ₹172 Cr, reflecting heavy investments in Quick Commerce & Going Out.
Food Delivery margins improved to 5.0% of NOV (from 3.9% YoY).
Operational Milestones:
Blinkit added 243 new stores (total 1,544), heading to 2,000 by Dec 2025.
Going Out annualized NOV reached ₹8,000 Cr, 30%+ YoY growth.
Cash balance: ₹18,857 Cr (stable QoQ).
Strategic Changes:
Rotational Leadership model adopted for agility and resilience.
Quick Commerce transitioning to inventory ownership—aiming for higher margins and operational control.
2. Consolidated Financial Analysis 💡
Segmental Revenue Mix (Q1 FY26 vs Q1 FY25):
Profitability (Margins %):
3. Profitability, Growth & Valuation Ratios 📊
4. Industry-Specific Key Performance Indicators (KPIs) ⚡
B2C Order Value (NOV): +55% YoY, now annualized at ~$10B.
Quick Commerce: +127% YoY NOV; 1,544 stores, adding ~250/quarter.
Going Out: 2mn+ avg. monthly users, 2x/month usage, NAOV ₹1,700+.
Food Delivery Margin: Improved to 5.0% of NOV.
Attrition & Utilization: Not explicitly mentioned; focus on tech & operational efficiency.
5. FY26 Estimates & Trend-Based Projections 📅
Historical Trend:
FY26 Projections (Estimate):
Sales Growth: 65–70% (consolidated revenue), led by Quick Commerce & B2B.
Profit Margin: Likely to remain low (~1%), with PAT recovering only as investments moderate.
Profit Growth: Should stabilize post Q2, expect FY26 full-year profit to remain subdued as margins gradually recover from Q1 low.
EBITDA Margins: Should improve as new stores mature and quick commerce transitions to inventory-led model.
6. Near-Term & Long-Term Outlook 🔮
Near-Term (Next 1–2 Quarters):
Growth: High double-digit revenue growth, continued investments in store expansion and new verticals.
Profitability: Margins to stay under pressure short-term, but with improving trends as scale and operational leverage kick in.
Risks: Competitive intensity in quick commerce, regulatory issues (GST on delivery charges), and global macro volatility.
Long-Term:
Industry Dynamics: Quick commerce and food delivery poised for rapid scale; leadership in both ensures compounding revenue.
Strategic Initiatives: Inventory ownership, tech-driven leadership, and ESG (Greening India initiative) position Eternal for sustained, responsible growth.
Profitability: Once investments moderate and store maturity rises, margin and ROCE should improve materially.
Competitive Advantage: Aggressive expansion, robust tech & data platform, and diversified business model.
7. Conclusion for Long-Term Investors 📝
Positives:
Market leader in food delivery, quick commerce, and going-out verticals.
Consistently high revenue growth (>50% YoY for 11+ quarters).
Large cash reserves for strategic investments.
Operational & tech-driven leadership model.
Risks:
Margins and profits remain under pressure due to ongoing investments.
High competitive intensity in quick commerce.
Regulatory uncertainties (GST issues).
Investment Stance:
Cautiously Optimistic for long-term investors. The business is in a high-growth phase; patience is needed for profitability to catch up. Near-term volatility is likely, but Eternal’s leadership and strategic investments should reward investors with a multi-year view.
8. Disclosure
This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions.
