Eternal Ltd Q3 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 1
Margin
Category 3
Fundraise
No
Order
Yes
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 1- Zomato expects Adjusted Revenue to grow at 40%+ year-on-year for the foreseeable future.
- Near term, growth could be north of 50%, driven largely by quick commerce (Blinkit), which is showing better-than-expected performance.
- Food delivery growth is expected to continue but may vary quarter to quarter; recent quarters showed ~29%-30% growth in food delivery GOV.
- Quick commerce is growing over 100% year-on-year with increasing store additions and deeper penetration in existing cities.
- The supply side, especially addition of cloud kitchens and restaurants, is expanding at ~20% YoY, contributing to growth.
- Blinkit plans further growth mainly within existing top cities with an under-indexed footprint and selecting new cities strategically.
- Growth focuses on quality and profitable expansion, balancing margin and volume growth.
- Monthly transacting customers (MTC) growth and higher ordering frequency among existing customers are key drivers ahead.
See what Eternal Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
No- There is no current plan for returning cash to shareholders via dividends or buybacks, as stated by management.
- The company emphasized the importance of having a strong balance sheet in a competitive industry and is focused on building the business.
- No specific mention of new fundraising through debt or equity in the recent call.
- The company is open to using cash for strategic purposes like potential M&A but has no active plans disclosed.
- Overall, the management is prioritizing organic growth and maintaining financial strength over raising new capital in the near term.
See what Eternal Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- No meaningful capex planned currently; focus is on leveraging existing resources for growth.
- Setting up one facility for value-added food supplies (sauces, spreads) under Hyperpure; capex expected to be small with attractive payback.
- No plans to expand with own label products in quick commerce at this time.
- Strategic testing of new markets to support potential future expansion beyond current cities.
- No plans for shareholder cash returns currently; focus remains on building the business and maintaining a strong balance sheet.
- No immediate M&A activity disclosed, but will evaluate if good opportunities arise.
- Emphasis on expanding supply chain and infrastructure with a long-term view considering 2-5 years horizon.
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Margin guidance
Category 3- Zomato expects overall Adjusted Revenue to grow at 40%+ year-on-year (YoY) for the foreseeable future, with potential to exceed 50% in the next few quarters.
- Food delivery growth was slightly below expectations last quarter but is supported by strong growth in quick commerce (Blinkit), which is driving the confidence for 50%+ growth.
- Blinkit is nearing Adjusted EBITDA breakeven, with continued focus on good-quality growth possibly at some margin compression, though margin expansion has continued so far.
- The company prioritizes growth over margin if opportunities and bandwidth allow, and aims to balance execution with quality growth to improve profits over time.
- Levers to influence growth and margins exist but are subject to market competition; currently, growth and margin expansion are progressing together.
- No immediate plans for capital return as company focuses on reinvestment and growth.
Order book
YesHow does Eternal Ltd rank vs peers in Retailing?
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What Eternal Ltd's management said in earlier quarters
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