ETERNAL Adjusted EBITDA Hit a Record Rs. 299 Crore - So Why Did the Re-Rating Finally Stall?

The Store Rollout Just Changed Gears

This is Zomato's fifteenth quarter as a public company - Q1FY25 (quarter ended June 30, 2024), reviewed not audited, approved by the board on August 1, 2024. The headline number is the cleanest read yet on where this company's growth engine actually sits: Adjusted EBITDA hit Rs. 299 crore, up from Rs. 194 crore last quarter and a Rs. 287 crore swing from Q1FY24's Rs. 12 crore - the fifth straight profitable quarter and the first time every one of the four reporting businesses expanded its margin in the same quarter. Revenue from operations came in at Rs. 4,206 crore (+18.1% QoQ, +74.1% YoY), profit before tax was Rs. 239 crore, and net profit was Rs. 253 crore.

The more consequential shift is in Blinkit's own numbers. Quick commerce's segment result swung to a Rs. 43 crore profit, more than 20 times last quarter's Rs. 2 crore - the first-ever quarterly segment profit was disclosed only one quarter ago, and it has already scaled past a rounding error. That came alongside the fastest single-quarter store rollout in the company's history: 113 net new stores in one quarter alone (451→526→639), more than the entire preceding fiscal year's 149 net additions combined. Average GOV^» per store, per day kept climbing to Rs. 9.56 lakh even through that expansion, up from Rs. 9.20 lakh - the same pattern flagged last quarter: faster store growth isn't diluting unit economics, it's compounding alongside them. On the earnings call Q&A, co-founder Albinder Dhananjaya raised the company's own long-term target from roughly 1,000 stores by March 2025 to about 2,000 stores by the end of 2026, while insisting the network stays profitable throughout.

None of this stopped the stock from having its quietest quarter of the entire profitable streak. See Target Valuation Range for why that's the more interesting story this quarter, not less.

The Prescription

Keep pushing the store count toward 2,000, but don't let the pace outrun what the balance sheet can absorb without help. Capex nearly doubled again this quarter (Rs. 146 crore, from Rs. 87 crore) as store additions tripled, and free cash flow actually fell QoQ (Rs. 54 crore, from Rs. 87 crore) even as Adjusted EBITDA hit a record - the same capex-versus-cash-generation tension flagged in the Q4 FY24 post. A company sitting on a Rs. 12,539 crore cash pile can absorb this for a long time, but the moment new-store capex growth consistently outpaces EBITDA growth is the moment to watch, not after.

Stop letting Hyperpure's loss plateau in absolute terms. The B2B business grew revenue 96% YoY to Rs. 1,212 crore - the fastest of any segment this quarter - but its Adjusted EBITDA loss margin has now held flat at roughly -2% of revenue for two straight quarters (Rs. (23) crore, then Rs. (22) crore), after five consecutive quarters of narrowing. A business growing this fast should be finding new operating leverage every quarter, not settling into a stable loss rate; if Hyperpure's scale is real, its margin curve should keep bending, not flatten.

Key Financial Metrics

Q1 FY25 (quarter ended June 30, 2024, reviewed not audited) vs Q4 FY24 (quarter ended March 31, 2024) and Q1 FY24 (quarter ended June 30, 2023) - consolidated, reported in INR crore and USD (converted at Rs. 83.50/$1 for Q1 FY25, Rs. 83.36/$1 for Q4 FY24, and Rs. 82.00/$1 for Q1 FY24)

Metric	Q1 FY25	Q4 FY24	QoQ	Q1 FY24	YoY
Revenue from Operations	Rs. 4,206 crore ($503.7M)	Rs. 3,562 crore ($427.4M)	✅ +18.1%	Rs. 2,416 crore ($294.6M)	✅ +74.1%
Adjusted Revenue (management non-GAAP)	Rs. 4,520 crore ($541.3M)	Rs. 3,873 crore ($464.6M)	✅ +16.7%	Rs. 2,786 crore ($339.8M)	✅ +62.2%
Operating Income (Profit before tax)	✅ +Rs. 239 crore ($28.6M)	+Rs. 161 crore ($19.3M)	✅ +48.4%	Rs. (15) crore $(1.8)M	✅ swung to profit
Net Income (Profit for the period)	✅ +Rs. 253 crore ($30.3M)	+Rs. 175 crore ($21.0M)	✅ +44.6%	+Rs. 2 crore ($0.2M)	✅ +12,550%
Adjusted EBITDA (management non-GAAP)	✅ +Rs. 299 crore ($35.8M)	+Rs. 194 crore ($23.3M)	✅ +54.1%	+Rs. 12 crore ($1.5M)	✅ +2,392%
Free Cash Flow (quarter-only, natively disclosed)	⚠️ +Rs. 54 crore ($6.5M)	+Rs. 87 crore ($10.4M)	⚠️ -37.9%	+Rs. 690 crore* ($84.1M)	⚠️ narrower

*Q1 FY24's Rs. 690 crore figure, per the Q1 FY24 post, was a management-disclosed quarter-only operating-cash figure before capex and included a large one-time treasury/FD-unwind; this quarter's Rs. 54 crore is operating cash flow of Rs. 200 crore less capex of Rs. 146 crore from the regulatory cash-flow statement, so the YoY comparison isn't strictly like-for-like.

Every quarter-over-quarter comparison in the table above is favorable except free cash flow, and that's the one line worth sitting with: operating cash flow itself actually improved to Rs. 200 crore from Rs. 174 crore, but capex nearly doubled to Rs. 146 crore from Rs. 87 crore as the Blinkit store rollout accelerated (see The Store Rollout Just Changed Gears). Total comprehensive income was Rs. 266 crore for the quarter. Consolidated cash and cash equivalents on the balance sheet fell to Rs. 249 crore from Rs. 309 crore, though that's a narrow measure - the company's own broader non-GAAP cash balance (including bank deposits and investments) actually grew to Rs. 12,539 crore from Rs. 12,241 crore, since the operating and investing cash flows this quarter simply shifted funds between cash-equivalent categories rather than spending them down.

Key Operational Metrics

Q1 FY25 by segment, INR crore unless noted

• B2C GOV (food delivery + quick commerce + Going-out): ✅ Rs. 15,455 crore, +14% QoQ / +53% YoY - the sharpest YoY acceleration in the series
• India food delivery GOV: ✅ Rs. 9,264 crore, +10% QoQ / +27% YoY
• Food delivery Adjusted Revenue: ✅ Rs. 2,256 crore, +10% QoQ / +30% YoY
• Food delivery Contribution margin (% of GOV): ⚠️ 7.3%, down from 7.5% - the first sequential dip in eight quarters, though management attributed it on the call to routine seasonality rather than a trend, and Adjusted EBITDA margin (3.4% of GOV, up from 3.3%) improved anyway
• Food delivery Adjusted EBITDA margin (% of GOV): ✅ 3.4%, up from 3.3% - a ninth straight quarterly improvement, still tracking toward management's stated 4-5% target
• Average monthly transacting customers (food delivery): ✅ 20.3 million, up from 19.0 million
• Average monthly active food delivery restaurant partners: ✅ 276,000, up from 270,000
• Hyperpure revenue: ✅ Rs. 1,212 crore, +27% QoQ, +96% YoY; Adjusted EBITDA margin held flat at -2% of revenue for a second straight quarter, after five consecutive quarters of narrowing (see The Prescription)
• Quick commerce (Blinkit) GOV: ✅ Rs. 4,923 crore, +22% QoQ / +130% YoY - the fastest YoY growth of any B2C segment
• Blinkit Contribution margin (% of GOV): ✅ 4.0% (+Rs. 199 crore), up from 3.9% - a fourth straight full quarter positive
• Blinkit Adjusted EBITDA margin (% of GOV): ✅ -0.1% (-Rs. 3 crore), up from -0.9% - nearly breakeven on management's own non-GAAP measure, even as the segment-result measure (see Segment Results) already turned a real profit
• Blinkit stores: ✅ 639 at quarter-end, up from 526 - 113 net new stores added this quarter, more than all of FY24's 149 net additions combined
• Blinkit average GOV per day, per store: ✅ Rs. 9.56 lakh, up from Rs. 9.20 lakh despite the fastest store-count growth on record
• Going-out GOV: ✅ Rs. 1,268 crore, +19% QoQ / +106% YoY; revenue Rs. 95 crore, +2% QoQ; Adjusted EBITDA returned to a Rs. 10 crore profit (1% of GOV) after last quarter's small loss - management now describes the dining-out business alone as running above a $500 million annualized GOV run-rate and already profitable
• Consolidated cash balance (management's broader non-GAAP measure): ✅ Rs. 12,539 crore at quarter-end, up from Rs. 12,241 crore - still no buyback or dividend, per management's standing FY24/FY25 commitment

Segment Results

Zomato reports five business-line segments - India food ordering and delivery, Hyperpure (B2B restaurant supply), Quick commerce (Blinkit), Going-out (dining-out plus Zomato Live), and All other segments (residual). Segment result is operating profit/loss before unallocated corporate costs, other income, share-based payment expense, finance costs, and exceptional items.

Segment	Revenue (Q1 FY25)	QoQ	Segment Result (Q1 FY25)	Q4 FY24 Result	Q1 FY24 Result
India food ordering and delivery	Rs. 1,942 crore ($232.6M)	✅ +11.7%	✅ Rs. 321 crore (profit)	Rs. 281 crore	Rs. 186 crore
Hyperpure	Rs. 1,212 crore ($145.1M)	✅ +27.4%	⚠️ Rs. (14) crore	Rs. (16) crore	Rs. (29) crore
Quick commerce (Blinkit)	Rs. 942 crore ($112.8M)	✅ +22.5%	✅ Rs. 43 crore (profit)	Rs. 2 crore	Rs. (105) crore
Going-out	Rs. 95 crore ($11.4M)	✅ +2.2%	✅ Rs. 11 crore (profit)	Rs. (10) crore	Rs. 4 crore
All other segments (residual)	Rs. 15 crore ($1.8M)	✅ +50.0%	✅ Rs. 1 crore (profit)	Rs. (10) crore	Rs. (4) crore
Total (segment result, before finance costs/unallocated items)	Rs. 4,206 crore gross		Rs. 362 crore	Rs. 247 crore	Rs. 52 crore

Every segment either grew its profit or narrowed its loss QoQ, the first time that's happened across all five lines at once in this series. Quick commerce is the standout - its Rs. 43 crore result is now larger than Going-out's entire revenue base, on a segment that lost Rs. 105 crore in the same quarter a year ago. India food ordering and delivery kept extending its own streak to a new high (Rs. 321 crore), and All other segments even turned a small Rs. 1 crore profit after five straight quarters in the red. Hyperpure remains the one segment still bleeding, though its loss narrowed slightly to Rs. 14 crore from Rs. 16 crore even as revenue grew fastest of any segment - the margin-plateau tension flagged in The Prescription.

Beyond the Usual

This is a reviewed (not audited) interim filing, so it carries the shorter regulatory quarterly-report footnotes rather than a full annual report's notes - genuine footnote depth here comes from the bundled Deloitte review reports and the standalone-entity financial statements, not a deep notes section.

The GST dispute is still open, eight months on, with no new information

Deloitte's consolidated review report again draws attention to Note 4: the December 2023 Show Cause Notices from GST authorities questioning a Rs. 420 crore tax liability (plus interest and penalty) on delivery charges collected between October 29, 2019 and March 31, 2022 - the same Emphasis of Matter first flagged in the FY24 year-end filing. Management's position - a strong case on the merits, backed by external expert advice - is unchanged, and Deloitte's conclusion remains unmodified. But the wording is verbatim what it was two quarters ago: no provision taken, no update on timing, no indication of where in the dispute process the matter actually sits. A multi-year contingent tax liability that sits unresolved for eight months and counting, with zero incremental disclosure, is worth continuing to watch rather than treating as settled background noise.

The subsidiary audit-scope disclosure shrank by more than 100x this quarter

The consolidated review report's equivalent of last year's "unnamed subsidiary" flag now covers 19 subsidiaries and 1 trust with combined quarterly revenue of just Rs. 26 crore and a total loss after tax of Rs. 7 crore - explicitly described by management as immaterial to the Group. That's a dramatic scale change from every prior quarter in this series: Q2 and Q3 FY24 each disclosed roughly Rs. 1,250-1,500 crore of quarterly revenue sitting with unnamed subsidiaries outside Deloitte's direct review, and the FY24 year-end filing put the full-year figure at Rs. 5,480 crore of revenue and Rs. 805 crore of net loss for just two entities. Whatever combination of entities made up those earlier, much larger disclosures, they are no longer sitting inside this quarter's "not reviewed by their auditors" bucket - the standing thread tracked since Blinkit's consolidation appears to have resolved itself in scale, even if the specific 19 entities are still unnamed.

A second subsidiary voluntarily gave up a financial-services license application in as many quarters

The standalone financial results disclose a Rs. 3 crore impairment loss on the Company's investment in Zomato Financial Services Limited (ZFSL), after ZFSL voluntarily withdrew its application for a Type II NBFC-ND (Non-Banking Financial Company) registration, which the RBI accepted. This directly mirrors last quarter's Rs. 39 crore impairment on Zomato Payment Private Limited (ZPPL) after it surrendered its payment-aggregator authorization. Two separate financial-services subsidiaries retreating from two separate RBI-regulated license applications in consecutive quarters is a pattern, not a one-off - Eternal is stepping back from building its own regulated payments/lending infrastructure faster than it's building it.

The parent's own cumulative losses at its three loss-making subsidiaries are disclosed together for the first time

The standalone financial statements' parental-support note names all three subsidiaries the Company has committed to backstop and gives each a cumulative loss figure in one place: Zomato Hyperpure Private Limited (ZHPL) at Rs. 667 crore accumulated losses, Zomato Entertainment Private Limited (ZEPL) at Rs. 79 crore, and Blink Commerce Private Limited (BCPL) at Rs. 1,544 crore accumulated since the August 10, 2022 acquisition closed. The Company's own review concluded no impairment is required on any of the three as of June 30, 2024, and the Audit Committee and Board noted the same. This is the first time in the series that BCPL's own cumulative loss since acquisition has been disclosed as a single running total - a useful reference point for judging how much capital Blinkit has actually consumed against the Rs. 43 crore quarterly segment profit it posted this quarter.

Target Valuation Range

Eternal is trading at roughly Rs. 1,74,487 crore market cap (Rs. 1,61,948 crore EV) - 10.4x annualized and 12.6x TTM statutory revenue (9.7x on annualized Adjusted Revenue), down slightly from 11.1x/13.0x/10.2x last quarter. For the first time in this profitable streak, the stock's move genuinely lagged the operating numbers instead of running ahead of them - a modestly reassuring sign that the market isn't pricing in more good news faster than the company can produce it, though the multiples are still elevated on any absolute basis.

Eternal's shares closed at Rs. 200.56 on June 28, 2024, up 10.1% from the Rs. 182.10 close at the end of Q4 FY24 - the smallest single-quarter move of the entire profitable streak (no stock split has occurred between this quarter and today, so the historical prices in this post are on a like-for-like nominal basis, not split-adjusted).

Market cap → enterprise value	Q4 FY24	Q1 FY25
Share price (period-end)	Rs. 182.10	Rs. 200.56
Shares outstanding	~868 crore	~870 crore
Market capitalization	Rs. 1,58,075 crore	Rs. 1,74,487 crore ($20.90B)
Less: cash and equivalents	Rs. 12,241 crore	Rs. 12,539 crore
Enterprise value	Rs. 1,45,834 crore	Rs. 1,61,948 crore

The peer-multiples sanity check is still the workable method here - there remains no comparably-sized listed pure-play Indian food-delivery-plus-quick-commerce peer.

Peer-multiple sanity check	Q4 FY24	Q1 FY25
Statutory revenue (annualized)	Rs. 14,248 crore	Rs. 16,824 crore
Statutory revenue (TTM)	Rs. 12,114 crore	Rs. 13,904 crore
Adjusted Revenue (annualized)	Rs. 15,492 crore	Rs. 18,080 crore
P/S (annualized quarter revenue)	11.1x	10.4x
P/S (TTM revenue)	13.0x	12.6x
P/S (Adjusted Revenue basis)	10.2x	9.7x

Every one of these multiples compressed slightly this quarter, the first time that's happened in the series since the profitability streak began - the 10.1% price move was meaningfully behind the quarter's own 18.1% revenue growth and 54.1% Adjusted EBITDA growth, a reversal of the pattern where price consistently outran the numbers.

A real discounted-cash-flow model remains premature, and for a more specific reason than last quarter's "still too early." Free cash flow is now not just thin but volatile quarter to quarter - Rs. 87 crore last quarter, Rs. 54 crore this quarter - moving in the opposite direction of Adjusted EBITDA because of the accelerating Blinkit capex cycle (see The Prescription). A DCF built today would have to make a real assumption about how long the 2,000-store buildout keeps consuming cash faster than EBITDA grows, and that assumption isn't yet supportable from two quarters of data pointing in different directions. Five straight profitable quarters on Adjusted EBITDA is a genuinely strong streak, but the free-cash-flow line - the one that would actually feed a DCF - still needs to show it can compound net of an aggressive, still-accelerating capex program before a real intrinsic-value estimate is worth publishing here.

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