Eternal Ltd reported a 77.6% year-over-year revenue increase to ₹24,140 crore in Q2 FY27. Despite tax provision pressures, the company beat EBITDA estimates by 4.9%, with brokerage analysts citing its new 'Dark.AI' initiative as a major growth driver.
Eternal Ltd reported a strong second-quarter financial performance for fiscal year 2027, highlighting significant growth across its core business lines. The company’s revenue reached ₹24,140 crore, representing a 77.6% increase compared to the same period in the previous year. This performance largely met market expectations for the quarter.
Operational Efficiency and AI Pivot
The company’s operational focus yielded a profit after tax of ₹130 crore, which is a 92.3% jump year-over-year. This increase occurred despite higher tax provisions, as the parent entity has now exhausted its carried-forward tax credits. The company also reported an EBITDA of ₹750 crore, outperforming brokerage estimates by 4.9%. This improved operational efficiency led to a 136 basis point expansion in EBITDA margin compared to the previous year.
A key part of the company's future strategy involves its foray into artificial intelligence under the brand 'Dark.AI'. Analysts view this move as a strategic differentiator for the business as it manages its existing operations in quick commerce and food delivery. The success of this capital-intensive expansion will depend on the management's ability to execute its investment plan effectively.
Investor Outlook and Risks
The market outlook for the second half of fiscal year 2027 remains broadly positive. Factors such as a delayed festive season and the deployment of surplus cash are expected to support demand. However, investors should be mindful of potential headwinds. Discretionary spending patterns remain a risk factor that could impact revenue growth. Furthermore, with the exhaustion of carried-forward tax credits, the company will have to maintain its strong operational performance to offset the higher tax burden on its bottom line.
ICICI Securities has maintained a positive stance on the company, setting a price target of ₹425 per share. The brokerage highlighted the company’s capital allocation strategy and its AI initiative as primary catalysts for growth. Investors will likely track the commissioning of these AI projects and the impact of consumer spending trends on quarterly results in the coming months.