Eternal Ltd reported revenue of Rs 24,100 crore in the second quarter of fiscal 2027, driven by strong growth in its quick-commerce business. Net profit declined to Rs 125 crore, missing estimates due to a 61% effective tax rate as the company exhausted its tax shields. Investors are closely watching the performance of its Blinkit division, which saw an 80% jump in order value, while the core food delivery segment showed steady volume.
Eternal Ltd has released its financial results for the second quarter of the 2027 fiscal year, showing a mix of strong revenue growth and a sharp impact on the bottom line due to tax changes. The company reported a net revenue of Rs 24,100 crore, which outperformed brokerage expectations of 11.7% sequential growth. However, the profit after tax stood at Rs 125 crore, significantly below the estimated Rs 392.8 crore.
Impact of Tax Shield Exhaustion
The primary reason for the profit miss was a sudden spike in the effective tax rate to approximately 61% for the quarter. This occurred because the company exhausted its carry-forward tax shields at the standalone parent level. In previous periods, these tax shields allowed the company to pay lower taxes. Now that these shields are used up, the company faces standard tax rates on its core profits. This structural change means that future earnings will be calculated with this higher tax burden, which the brokerage firm Motilal Oswal has factored into its revised earnings estimates.
Quick-Commerce Growth
Despite the profit miss, the quick-commerce arm, Blinkit, continues to be a key driver for the company. The segment recorded a Net Order Value of Rs 20,900 crore, representing a year-on-year growth of 79.3%. Analysts view this as a sign of business maturity. While the quick-commerce space remains highly competitive, the firm's management has focused on gradual margin expansion by achieving store maturity and operational efficiency. The brokerage expects this segment to maintain a strong long-term growth trajectory of over 60%.
Food Delivery Segment
The company’s core food delivery business showed stability in the second quarter, with a Net Order Value of Rs 11,450 crore, which was in line with analyst projections. While the adjusted EBITDA as a percentage of Net Order Value saw a minor dip of 10 basis points to 5.5%, the overall business structure in food delivery is seen as sound. The company remains focused on balancing growth with profitability in a market that faces intense pressure from competitors.
Investor Monitorables
Moving forward, shareholders may watch how the company manages its profitability under the new tax regime. The core monitorables include whether the quick-commerce division can sustain its high growth rates and whether the food delivery segment can protect its margins despite the competitive environment. The brokerage has maintained a positive rating on the stock, with a target price of Rs 420, citing that the company’s position in the retail and grocery e-commerce shifts provides a long-term investment case, even with the recent tax-related adjustments to earnings expectations.