Eternal Ltd Management Discussions

Note: During FY25, the Company acquired the entertainment ticketing business from Paytm (which comprised of two entities - Orbgen Technologies Pvt Ltd(OTPL) and Wasteland Entertainment Pvt Ltd (WEPL), which have now become wholly owned subsidiaries of Eternal Limited). Consolidation of the acquired business in the books of the Company is from 27-Aug-2A onwards (transaction closing date).

Consolidated statement of profit and loss

INR crore

Income

Consolidated revenue from operations increased 67% YoY to INR 20,243 crore in FY25 driven by growth across our B2C businesses (food delivery, quick commerce and going-out) and B2B supplies business (Hyperpure).

a) Food delivery revenue from operations grew 27% YoY to INR 8,080 crore in FY25, primarily driven by increase in commission income, ad income and platform fee. Increase in commission income was driven by the 20% YoY growth in NOV. Ad income growth was driven by both NOV growth and better ad monetization. Platform fee grew faster than food delivery revenue due to (i) increase in average platform fee per order in FY25 vis-a-vis FY24 and (ii) inclusion of platform fee for the full fiscal FY25 compared to FY24 where platform fee was applicable from Q2FY24 onwards.

(Note: Food delivery revenue as per the financial statements is different from the food delivery Adjusted Revenue that we have presented on prior pages of this report as that also includes the customer delivery charges that we collect on behalf of delivery partners from customers (net of any discounts, including free delivery discounts on account ofZomato Gold program) and platform pee paid by the customers in the food delivery business (that is not already included in revenue). Adjusted Revenue is a metric tracked by the management to analyse the business performance. Refer page 42 for the reconciliation between consolidated Adjusted Revenue and revenue from operations.)

b) Quick commerce revenue grew 126% YoY to INR 5,206 crore in FY25 driven by 113% YoY NOV growth and increase in revenue (as a % of NOV).

c) Going-out revenue is not comparable between FY24 and FY25 as FY25 financials consolidate the acquired entertainment ticketing business from August 27, 2024 (transaction closing date). Including the impact of the acquisition, going-out revenue grew 186% YoY to INR 737 crore in FY25. On a like-for-like basis (i.e., excluding the impact of the acquisition), revenue grew 106% YoY in FY25 largely driven by growth in the India dining-out business.

d) Hyperpure revenue grew 95% YoY to INR 6,196 crore in FY25, driven by growth in both the core restaurant supplies business and the non-restaurant business comprising B2B sales of mainly fresh food and staples to the sellers on the Blinkit marketplace. Revenue growth in the restaurant business was largely driven by increase in the number of restaurant outlets served and better price realization across certain product categories. Growth in the non-restaurant business was driven by the growth in our quick commerce business.

Other income increased by INR 230 crore to INR 1,077 crore in FY25 primarily due to increase in treasury income driven by increase in investable cash balance on account of the net proceeds received as part of our QIP in November 2024.

Expenses

Cost of goods sold (COGS) increased by 93% YoY to INR 5,565 crore in FY25. COGS primarily relates to the Hyperpure business and the YoY increase was broadly in line with the growth in Hyperpure Revenue.

Employee benefits expenses increased 54% YoY to INR 2,558 crore in FY25. This primarily includes salaries, wages, bonuses and share-based compensation paid to our on-roll employees across all our businesses. Increase in expense was largely due to increase in salaries & wages and share-based payment expense. Salaries and wages grew YoY due to the impact of annual increments and 105% YoY increase in headcount to 16,868 in FY25. Increase in headcount was primarily due to team expansion in the quick-commerce and going-out business segments including consolidation of employees onboarded as part of the acquisition of the entertainment ticketing business. Share-based payment expense grew 55% YoY to INR 798 crore in FY25.

Finance costs increased 114% YoY to INR 154 crore in FY25. This primarily includes interest on lease liabilities recorded under Ind AS 116 which increased YoY due to the expansion in store and warehouse network in the quick commerce business.

Depreciation and amortization expense grew 64% YoY to INR 863 crore in FY25. This includes (i) depreciation on fixed assets, (ii) depreciation as recorded under Ind AS 116 and (iii) amortization of intangible assets. Increase in expense was driven by an increase across all these three components. Depreciation on fixed assets and depreciation recorded under Ind AS 116 primarily increased due to accelerated store and warehouse network expansion in the quick commerce business. Amortization expense increased YoY due to the incremental intangible assets created during the year due to the acquisition of the entertainment ticketing business.

Delivery and related charges increased 46% YoY in FY25 to INR 5,728 crore. This includes (i) payouts¹ to delivery partners for last mile deliveries, (ii) delivery partner support cost and (iii) cost of consumables issued to delivery partners at the time of onboarding. Increase in expense was largely due to increase in delivery partner payouts in the food delivery and quick commerce businesses due to the growth in order volumes. Delivery partner support cost and cost of consumables also increased YoY due to increase in overall order volumes and delivery partners on the platform.

Advertisement and sales promotion expenses increased 38% YoY to INR 1,972 crore in FY25. This includes

(i) platform funded subsidies (to the extent not netted off from revenue), (ii) marketing & branding costs, (iii) customer appeasement costs and (iv) refunds across our business operations.

Increase in expense was primarily driven by increase in marketing & branding costs and refunds. Marketing and branding costs increased primarily due to (i) growth investments in the quick commerce business including ramping up of digital marketing spends to drive customer growth and (ii) spends relating to marketing of District app which was launched in FY25. Refund cost increased YoY primarily due to increase in food delivery and quick commerce refunds as order volumes scaled.

IT support services, server and communication costs increased 33% YoY to INR 644 crore in FY25. This primarily includes server hire charges, software subscription cost and communication costs incurred for our consolidated operations. Increase in expense was primarily driven by increase in cloud computing costs which are part of the server hire charges. Increase in this cost was largely due to increase in order/ transaction volumes across our B2C businesses.

Outsourced support cost increased 73% YoY to INR 570 crore in FY25. This primarily includes costs related to (i) store related off-roll manpower costs in our quick commerce operations and (ii) customer call center support across our consolidated operations. Increase in expense was largely driven by increase in off-roll manpower deployed across stores in the quick commerce business. Support cost declined YoY as we moved part of our customer support team in-house (on-roll). The corresponding cost of the new team onboarded inhouse has been captured in employee benefits expense line item.

Payment gateway charges increased 20% YoY to INR 228 crore in FY25 primarily driven by increase in NOV transacted across our B2C platforms.

Others expense increased 99% YoY to INR 2,341 crore in FY25. This primarily includes quick commerce warehouse management & associated logistics cost, rental expenses, legal & professional fee, general & admin expenses, insurance cost, amongst others. Increase in expense was largely driven by increase in costs associated with our quick commerce business including rentals & utilities, warehouse management expenses, freight and logistics expense (excluding last mile cost) and others. Part of the increase was also due to growth in live event costs (e.g., artist and venue booking) in case of events co-produced, managed and marketed by the Company. Other expenses such as legal & professional fee, G&A expenses also grew YoY.

Note:

7. Comprises of(i) availability fees paid by Zomato to the delivery partner over and above the customer delivery charge collected on behalf of delivery partners in the food delivery business and (ii) delivery partner payouts in the quick commerce business.

Additional notes: Adjusted Revenue and Adjusted EBITDA reconciliation

INR crore

Note:

7. From Q2FY25 onwards, provision for income tax has been created on other income (primarily being treasury income) post adjustment of unabsorbed depreciation permitted under the Income Tax Act. No provision is created on business income since that is being set off against the carried forward losses from the past years.

2. There could be some totaling anomalies in the numbers displayed above due to the impact of rounding off.