Zomato parent's stock down 10% this month: Buy or sell?
What's the story
Eternal (parent company of Zomato) has witnessed significant volatility in its share price. The company's stock rose by 12% over the last year but fell by 10% in the last month alone. This decline comes despite a massive jump in revenue and an overweight rating from Morgan Stanley. The firm's report suggests that the recent correction presents a lucrative opportunity for investors. So, should you buy or sell? Let's see.
Market fluctuations
Eternal's share price performance and market reaction
Eternal's share price has been on a rollercoaster ride, reflecting investor uncertainty over the company's changing business model and financial performance. The stock hit its 52-week high of ₹368.40 in October 2025, just months after hitting its 52-week low of ₹189.60 in April 2025. Today, it was trading at ₹308.20 per share as investors weighed the company's recent financial results against its long-term growth potential.
Financial performance
Q2 results and revenue surge
Eternal reported a 63% year-on-year fall in profit after tax (PAT) at ₹65 crore for the second quarter (Q2) of FY26. However, the company's revenue from operations jumped by an impressive 183% to ₹13,590 crore in Q2. This is up from ₹4,799 crore during the same period last year. The company's rebranding from Zomato to Eternal took place in March this year.
Brokerage insights
Morgan Stanley's target price and investment strategy
Morgan Stanley has maintained its overweight rating on Eternal and raised its target price to ₹427 from ₹420. The global brokerage firm said the recent 14-15% correction in the stock presents a good opportunity for long-term investors. "The recent pullback offers one of the best risk-reward setups in our coverage, and we would use the weakness to accumulate," Morgan Stanley said in its report.
Strategic focus
Eternal's market share strategy and profitability outlook
Morgan Stanley highlighted Eternal's focus on gaining customer market share, saying that wallet share gains can follow once the user base expands. The brokerage firm also noted that even in a stress case where aggressive competition delays the profitability, the downside is limited and does not change the company's structural outlook. This suggests a positive long-term view for Eternal despite short-term challenges.
Market strategy
Technical analysis and future projections for Eternal's stock
Eternal's recent price action has caught the attention of technical analysts. Anand James, Chief Market Strategist at Geojit Investments Limited, said the recent stabilization in the counter has opened up the possibility of an upside rebound. Hitesh Tailor from Choice Broking also noted that while Eternal is trading near ₹304.30 with a positive longer-term structure, traders should wait for clear confirmation before entering fresh positions.