Eternal Share Price Falls 5% After Q4FY25 Earnings

On Friday, the Eternal share price declined by 5 percent on the NSE after reporting its Q4FY25 and full-year FY25 financial results, showcasing robust revenue growth alongside profit challenges. 

In Q4FY25, the company’s revenue from operations surged by 64 percent year-on-year to Rs. 5,833 crore, driven by strong performance across its key segments. The food delivery business grew 18 percent to Rs. 2,054 crore, while the B2B supplies segment, Hyperpure, saw an impressive 93 percent increase to Rs. 1,840 crore. The quick commerce platform Blinkit led growth with a 122 percent jump in revenue to Rs. 1,709 crore. Additionally, the going-out segment revenue more than doubled, rising 146 percent to Rs. 229 crore. 

Despite this top-line growth, Eternal’s net profit for Q4 declined by 78 percent to Rs. 39 crore from Rs. 175 crore in the same quarter last year. The sharp decline resulted from a steep increase in expenses, including delivery costs, employee benefits, and marketing spend. 

Total expenses rose by nearly 68 percent to Rs. 6,104 crore, with delivery-related costs alone accounting for around 25 percent of total expenditure at Rs. 1,552 crore. Employee costs increased 56 percent to Rs. 750 crore, and advertising expenses grew 63 percent to Rs. 634 crore. 

EBITDA also declined by 16 percent to Rs. 72 crore, and the EBITDA margin contracted by 120 basis points to 1.23 percent, reflecting the pressure from accelerated investments in expanding quick commerce stores and a slowdown in food delivery demand due to delivery partner shortages and market competition, as per the shareholders' letter released by the company. Eternal announced the closure of its Zomato Quick and Everyday services, citing the lack of a profitability path for these verticals.

For FY25, Eternal posted consolidated revenue from operations of Rs. 20,243 crore, marking a 67 percent increase from Rs. 12,114 crore in FY24. Total income rose by 64 percent to Rs. 21,320 crore. The company’s net profit for FY25 increased by 50 percent to Rs. 527 crore from Rs. 351 crore in the previous year. The earnings per share (EPS) stood at Rs. 0.60 for basic and Rs. 0.58 on a diluted basis. 

The B2C business net order value (NOV) grew by 53 percent year-on-year to Rs. 17,440 crore in Q4, with a 5 percent quarter-on-quarter increase. Excluding the impact of the Paytm entertainment ticketing acquisition, NOV growth was 48 percent year-on-year. Hyperpure continued its strong momentum with a 93 percent year-on-year revenue increase and 10 percent quarter-on-quarter growth. Consolidated adjusted revenue grew 60 percent year-on-year and 8 percent quarter-on-quarter to Rs. 6,188 crore, although consolidated adjusted EBITDA declined 15 percent year-on-year to Rs. 165 crore due to investments in quick commerce expansion and partial offsets by improved food delivery margins.

Overall, Eternal’s FY25 results reflect a company rapidly expanding its revenue base through diversified business lines, specifically quick commerce and B2B supplies. However, as the competition gets intense in the quick commerce space, the management priority is to focus on gaining market share, which can cause near-term profitability pressures from aggressive investments. The decision to shut down unprofitable services like Zomato Quick signals a focus on optimizing its portfolio for sustainable growth.