Experts say the company is expected to report a strong topline in Q2, largely driven by expansion in its quick commerce arm Blinkit. However, profitability could take a hit for the same reasons, coupled with challenges in the core food delivery segment.
Eternal’s profit could fall up to 71% on a year-on-year basis, while revenue may surge up to 137% according to estimates of four brokerages.
Morgan Stanley remains most bullish on the topline growth compared to other brokerages, viz. BofA, Nuvama Institutional Equities and Bonanza.
Eternal’s profitability is expected to remain under pressure in the quarter gone by, even as topline momentum stayed strong. The sustained weakness in margins reflects higher delivery and rider costs, which have offset the benefit of robust revenue growth.
BofA Securities estimates the company’s profit after tax (PAT) at Rs 52 crore, marking a sharp 107% sequential improvement but still down 71% on a year-on-year basis. Meanwhile, Bonanza expects PAT to decline 30% YoY to Rs 120 crore, citing elevated customer incentives and heightened competitive intensity as key drags on earnings.On the revenue front, Eternal is likely to deliver a strong performance, led by continued traction in its quick commerce arm, Blinkit. BofA projects Q2 revenue at Rs 8,480 crore, representing 77% YoY and 18% QoQ growth. Morgan Stanley is more optimistic, estimating revenue at Rs 12,170 crore, up 137.3% YoY and 60.9% QoQ. Nuvama expects a 90% YoY and 27% QoQ increase, driven by Blinkit’s rapid expansion and improved order frequency in metro and tier-I markets.Also read: KEI Industries shares crash 9% despite reporting 31% growth in Q2 net profit
At about 10:25 am, shares of Eternal were trading at Rs 359, higher by 1.3% from the last close on the NSE. Shares of online food and grocery delivery platforms have been on a strong run, rallying over 60% in the last 6 months.
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