Shares of Eternal Ltd. (formerly Zomato) fell sharply in early trade on Friday after the food delivery and quick commerce company posted a steep decline in its March quarter earnings. The stock dropped as much as 5.33% to ₹220.10 on the BSE shortly after markets opened.
In the fourth quarter of FY25, Eternal reported a consolidated net profit of ₹39 crore, marking a 78% year-on-year decline from ₹175 crore in the same quarter last year. This sharp fall in profitability comes despite robust revenue growth and increased scale in its operations.
Revenue from operations rose 64% YoY to ₹5,833 crore during the quarter, signaling strong topline momentum. However, operating margins took a hit, with adjusted EBITDA falling 15% YoY to ₹165 crore. The EBITDA margin as a percentage of Gross Order Value (GOV) also deteriorated, slipping to -1.9% from -1.3% in the previous quarter.
Eternal’s food delivery segment recorded a 17.5% YoY growth in adjusted revenue to ₹2,409 crore in Q4. The GOV for the segment came in at ₹9,778 crore, a slight 1.3% decline on a sequential basis, although it showed growth from ₹8,439 crore in Q4FY24.
The company continued its aggressive expansion strategy, adding a record 294 new stores during the quarter. As of March-end, Eternal held a cash balance of ₹18,824 crore, marginally down from ₹19,235 crore in the previous quarter.
Despite the near-term pressure on margins, Eternal posted a 50% growth in annual profit for FY25, reaching ₹527 crore compared to ₹351 crore in FY24.
Analysts at Emkay Global Financial Services noted that while the company’s Q4 performance was broadly in line on the operating front, profitability pressures may persist. The firm attributed this to higher customer acquisition costs and increased investments in expanding the company’s physical presence, particularly in its Blinkit quick commerce operations.
“Eternal is prioritizing market share expansion over short-term profitability amid rising competitive intensity,” said Dipeshkumar Mehta, Senior Research Analyst at Emkay Global. He added that losses could persist in the near term as the company eyes a target of 2,000 stores by December 2025.
Nevertheless, Emkay Global maintains a ‘Buy’ rating on Eternal stock, with a March 2027 target price of ₹290, based on discounted cash flow (DCF) analysis. At 9:18 AM, Eternal shares were trading at ₹226.90 apiece, down 2.41% from the previous close.
