Shares of food delivery and quick commerce major Eternal Ltd, formerly known as Zomato, hit a fresh record high on Tuesday, July 22, after its seven percent jump in the previous session following its earnings report for the April-June period.
Eternal posted a steep 90 percent year-on-year decline in net profit for the first quarter of FY26, with earnings falling to Rs 25 crore from Rs 253 crore a year earlier. Despite the profit slump, revenue rose 70 percent year-on-year to Rs 7,167 crore during the same period.
At close, shares of the firm were quoting Rs 299.75, higher by 10.3 percent on the NSE, slightly off its record high of Rs 311.25 per share.
Blinkit generated Rs 2,400 crore in revenue in Q1, outpacing Zomato's food delivery revenue, which stood at Rs 2,261 crore. The firm's consolidated EBITDA for the quarter came in at Rs 115 crore, down 35 percent compared to the same period last year.
In the previous session, positive commentary from the management lifted Eternal's stock to five-month highs. The firm said that Blinkit's net order value (NOV) overtook that of Zomato for the first time. “Our B2C operations have now reached nearly $10 billion in annualised NOV, with quick commerce accounting for nearly half of it,” said CFO Akshant Goyal.
Should you buy, sell, or hold shares of Eternal?
Despite the company's net profit cracking 90 percent in trade, a large number of brokerages remained bullish on Eternal's shares.
International broking house Jefferies upgraded its outlook on the firm to 'buy', with an increased price target of Rs 400 per share. The brokerage said that while Q1 performance was mixed, the management commentary was notably positive.
Growth continues to be strong, and the margin outlook has improved as competitive pressures ease. Although food delivery growth moderated, the management expects a pick-up with short-term margins remaining rangebound.
CLSA reiterated its 'high-conviction outperform' tag on Eternal, maintaining its price target of Rs 385 per share, as Blinkit's performance exceeded estimates in terms of GOV and contribution. Bernstein, too, reaffirmed its 'outperform' rating, hiking its target price to Rs 320 per share on the strong beat in the quick-commerce segment.
On the flip side, Macquarie was an outlier with an 'underperform' rating and a price target of Rs 150 per share. The brokerage said that food delivery growth lagged, even as quick commerce posted explosive growth. The moderation in quick commerce losses is viewed as a positive. However, competitive intensity is expected to stay high, leading to a prolonged period of losses.
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