Eternal shares surge 11%: What is behind today's rally?
What's the story
Eternal Ltd, formerly Zomato, witnessed its shares hitting the upper circuit in early trading on Tuesday. At the time of writing, Eternal stock was up 11% at ₹301.2. This comes after a 7% surge in the previous session post-earnings report for Q1 FY26. This massive rally in share price comes despite a whopping 90% YoY decline in Q1 net profit to ₹25 crore from ₹253 crore last year. However, revenue surged by 70% YoY to ₹7,167 crore during the period.
Revenue comparison
Blinkit surpasses Zomato in revenue for Q1
In Q1, Blinkit generated ₹2,400 crore in revenue, surpassing Zomato's food delivery earnings of ₹2,261 crore. The company's consolidated EBITDA for the quarter stood at ₹115 crore, a 35% decline compared to the same period last year. Despite the profit slump in trade, many brokerages remained bullish on Eternal's shares due to positive management commentary and strong growth expectations.
Market outlook
Jefferies upgrades to 'buy,' raises target to ₹400 per share
International brokerage firm Jefferies upgraded its rating on Eternal to 'buy,' raising the price target to ₹400 per share. The firm said that while Q1 performance was mixed, the management commentary was notably positive. CLSA maintained its 'high-conviction outperform' tag on Eternal with a price target of ₹385 per share, as Blinkit's performance exceeded estimates in terms of GOV and contribution.
Analyst ratings
Bernstein sees strong growth in quick-commerce segment
Bernstein also maintained its 'outperform' rating, raising the target price to ₹320 per share on strong growth in the quick-commerce segment. However, Macquarie differed with an 'underperform' rating and a price target of ₹150 per share. The brokerage noted that while quick commerce posted explosive growth, food delivery growth lagged behind expectations.