Eternal Q2 FY27 Results (NSE: ETERNAL)
Signal: Growth decelerated
The read
The key inflection is scale with improving but not yet linear operating profitability: revenue reached ₹24,138 crore, up 77.5% YoY and 19.4% QoQ, while the approximately 4.6% operating margin remained above the year-ago level but declined from approximately 4.8% in Q1FY27. PAT of ₹125 crore was supported by operating profit, with other income of ₹351 crore declining 6.4% YoY rather than driving the earnings increase.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹24,138 Cr | +77.5% | +19.4% |
| Net profit | ₹125 Cr | +92.3% | |
| EPS | ₹0.14 | +100.0% | |
| EBIT margin | 4.6% |
P&L walk
Revenue accelerated to ₹24,138 crore, up 77.5% YoY and 19.4% QoQ, while the gross margin calculation expanded sharply on the reported cost structure; EBITDA margin was approximately 4.6%, down sequentially from approximately 4.8%, and PAT rose 92.3% to ₹125 crore.
Key positives
- Revenue reached ₹24,138 crore, increasing 77.5% YoY and 19.4% QoQ, extending the platform's rapid scale-up.
- Employee costs rose 32.5% YoY to ₹1,146 crore while revenue rose 77.5%, helping operating margin improve versus the year-ago P&L.
- Operating cash flow was positive at ₹278 crore in H1FY27 versus ₹38 crore in H1FY26, providing support for the reported profit trajectory.
- PAT increased 92.3% YoY to ₹125 crore while basic EPS increased 100.0% to ₹0.14, with no material PAT-to-EPS divergence.
Key concerns
- Operating margin of approximately 4.6% declined sequentially from approximately 4.8%, interrupting the margin expansion seen in Q4FY26 and Q1FY27.
- Depreciation rose 66.2% YoY to ₹625 crore and finance costs rose 80.2% to ₹155 crore, indicating increasing cost absorption as the asset base expands.
- The filing does not disclose volumes, paid customers, order frequency, realisation per order or contribution margin, limiting assessment of whether the 77.5% revenue growth is volume-led or mix-led.
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