ETERNAL LIMITED - Quarterly Result Update Q4'25

Eternal Limited Q4 FY25 result, Margins declined, below street’s estimates It has reported 77.7% fall in consolidated net profit to Rs 39 crore despite a 69.8% increase in revenue from operations to Rs 5,833 crore in Q4 FY25 as compared with Q4 FY24, grew by 64%. Total operating expenditure rose by 65.7% year-over-year (YoY) to Rs 5761 crore during the period under review. Consolidated adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) declined 15 per cent YoY to Rs 165 crore in Q4 FY25. Interest expense and depreciation charge for the fourth quarter were Rs 56 crore (up 180% YoY) and Rs 287 crore (up 105% YoY), respectively. EBIDTA Margins declined by 118bps to 1.23%. Profit before tax in Q4 FY25 stood at Rs 97 crore, down by 39.8% from Rs 161 crore recorded in Q4 FY24. Tax outgo for the March 2025 quarter was Rs 74 crore. The food and grocery delivery company’s profitability was significantly impacted due to mounting losses from the company’s quick commerce business. The company stated that it would continue to aggressively chase market share in quick commerce, ensuring that near-term profit goals don’t come in the way of long-term growth. For FY25, Eternal has reported net profit of Rs 527 crore (up 50.1% YoY) and revenue from operations of Rs 20,243 crore (up 67.1% YoY). Management comment The increase in losses was expected and in line with our plan to pull-forward expansion of our store network. We added 294 net new stores in Q4FY25, making it our highest-ever net store addition in a single quarter. As a result, ~40% of our overall network of 1,301 stores are underutilized stores, opened in the last two quarters alone (216 in Q3FY25 and 294 in Q4FY25). We also added 1 million sq ft of new warehousing space to support the store expansion. Despite that, the Contribution margin (which includes all expansion costs except capex) increased from 3.8% to 3.9% of NOV.