Oct 21 (Reuters) - India's Eternal second-quarter profit nearly doubled, the company reported on Wednesday, but fell well short of analyst expectations as higher delivery, employee and depreciation costs weighed.
Consolidated net profit surged 92.3% to 1.25 billion rupees ($13.24 million) in the quarter ended September 30, from 650 million rupees a year earlier. Analysts, on average, had expected a profit of 2.71 billion rupees, according to data compiled by LSEG.
India's quick-commerce companies, including Eternal's Blinkit, have been expanding their networks of small warehouses, known as dark stores, to meet growing demand for rapid deliveries of groceries and other household essentials, while competing for market share.
Analysts had expected Blinkit, the market leader and biggest contributor to its parent's topline, to maintain its growth momentum during the quarter, with brokerage Jefferies forecasting a 23% sequential rise in net order value (NOV).
While Eternal's revenue from operations surged 77.6% to 241.38 billion rupees, beating analyst expectations of 239.21 billion rupees, total expenses rose almost as much to 241.66 billion rupees.
Blinkit's NOV rose 79.3% year-on-year to 209.40 billion rupees, while its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) improved to 1.84 billion rupees from 1.02 billion rupees in the preceding quarter.
The company added 308 Blinkit stores during the quarter, taking the total to 2,751. It now expects to cross 3,500 stores by March 2027 and plans to have about 5,000 stores by March 2028.
Eternal's food-delivery business, Zomato, reported a 21.5% rise in net order value to 114.45 billion rupees, while its adjusted EBITDA rose 25% year-on-year to 6.27 billion rupees.
Separately, Eternal founder Deepinder Goyal unveiled details of Dark.ai, an artificial intelligence service focused on protecting users' conversations through end-to-end encryption, which the company hopes to launch globally by the end of 2026.
($1 = 94.4250 Indian rupees)
Reporting by Surbhi Misra in Bengaluru; Editing by Harikrishnan Nair
Source: Reuters