Eternal, the parent company of Zomato and Blinkit, is set to announce its Q2FY27 financial results on Wednesday, October 21, after market hours. Experts expect the company to report a significant increase in revenue and net profit, driven by growth in its food delivery and quick commerce businesses.
- Revenue is expected to rise between 61% and 66% year-on-year (YoY).
- Net profit could increase by 390% to 490% YoY due to a low base last year.
- Growth is supported by market share gains and Blinkit's store expansion.
- Investors will focus on key metrics like gross order value (GOV) and net order value (NOV).
- Stock price has gained over 15% this year but shows signs of losing momentum.
What are the expected financial results for Eternal in Q2FY27?
Analysts predict Eternal's revenue will rise sharply, reaching between ₹21,900 crore and ₹22,630 crore. This represents an 8% to 12% increase quarter-on-quarter (QoQ) and a 61% to 66% increase YoY, compared to ₹13,590 crore in Q2FY26 and ₹20,211 crore in the previous quarter.
Net profit is expected to surge by 390% to 490% YoY, reaching between ₹320 crore and ₹385 crore. This jump is mainly due to the low profit base in the same quarter last year, when net profit was ₹65 crore. Sequentially, profit could rise 250% to 320% from ₹92 crore in the previous quarter.
How is Blinkit's business growth influencing Eternal's performance?
Blinkit's expansion of its quick commerce stores is a key driver behind Eternal's strong revenue growth. The company is gaining market share in both food delivery and quick commerce sectors. Investors will closely watch the number of new dark stores added by Blinkit and the net order value (NOV) to assess ongoing growth.
What should investors look for in the management commentary?
During the earnings announcement, investors will seek insights on the overall business outlook, competition levels, and the profitability of the quick commerce segment. Management commentary on strategies to sustain growth and improve margins will be important for understanding future prospects.
How has Eternal's stock performed leading up to the results?
As of October 20, Eternal's shares closed slightly lower at ₹320. The stock has risen over 15% this year, mainly due to Blinkit's strong business growth. After a rally of about 37% from June to late September, the stock has traded within a range of ₹311 to ₹332 since mid-August, showing signs of reduced momentum.
Technical indicators suggest no clear trend currently, with the stock positioned near key moving averages and an average directional index (ADX) of 14.7, indicating a lack of strong directional movement.
What are the market expectations for stock movement after the results?
The options market anticipates a price movement of approximately ±4.8% around the current futures price of ₹320 by the October 27 expiry. This implies a trading range roughly between ₹305 and ₹335, aligning with recent price resistance and support levels.
Historically, Eternal's stock has shown limited movement beyond this range on the day following earnings, with only one instance of a 10.3% jump in the last five quarters.
What trading strategies might investors consider around the earnings release?
Investors expecting the stock to remain within the current range might consider a short straddle strategy, which profits if the stock price stays between ₹305 and ₹335. However, due to the possibility of sharp moves, strict stop-loss measures are advised.
For those anticipating a significant price change, a long straddle could be used, benefiting from a move outside the current range shortly after the results. Directional traders may wait for a breakout above ₹332 or a breakdown below ₹311 to implement bull put or bear call spreads, respectively, possibly using November contracts due to the short time until October expiry.
Overall, Eternal's Q2FY27 results are highly anticipated due to expected strong financial performance driven by Blinkit's growth and market share gains. Investors will closely monitor the company's outlook and key business metrics to gauge future prospects.
