Eternal shares tumble 9% from day's high with management transition in focus, brokerages' concerns over competition

Eternal share price

• Eternal shares dropped 9% from day's high after Q3 results and CEO resigned.
• Q3 net profit up 73% YoY to Rs 102 crore; revenue surged 202% to Rs 16,315 crore
• Brokerages lower target price but keep 'Buy' rating, citing growth potential.

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The shares of Eternal erased all morning gains and sharply fell more than 9 percent from its day’s high on January 22. This came as brokerages analysed the Zomato and Blinkit-parent’s Q3 results, and what lies ahead.

The shares of the company dropped to Rs 276.05 apiece in the afternoon. Earlier during the day, the stock had jumped around 8 percent to hit an intraday high of Rs 305 apiece. This was the highest level seen by the stock since December 1 last year.

Eternal Q3 Results:

Food delivery and quick commerce firm Eternal, which owns the Zomato and Blinkit, on January 22 reported a consolidated net profit of Rs 102 crore for the October-December quarter of the ongoing financial year 2026. This marked a 73 percent year-on-year (YoY) rise from Rs 59 crore net profit reported in the same quarter of the previous financial year.

The firm's revenue from operations meanwhile jumped 202 percent to Rs 16,315 crore in Q3 FY26, from Rs 5,405 crore in Q3 FY25. Total expenses for the Gurugram-based firm increased 198 percent to Rs 16,493 crore in the quarter ended December.

Along with the Q3 results, the company announced that founder and Group CEO Deepinder Goyal has resigned from his role, and Blinkit’s CEO Albinder Dhindsa will take over.

Motilal Oswal sees Eternal in a 'Dogfight':

Motilal Oswal noted that Eternal's revenue growth beat its estimate. Zomato’s NOV of Rs 9,840 crore and Blinkit’s adjusted EBITDA margin at breakeven was also above its estimates.

However, the brokerage said that the EBITDA respite in Blinkit will likely be short-lived as competitive intensity in quick commerce (QC) re-accelerates. “Potential elevated discounting/investments in both QC and the going-out business are anticipated to constrain profitability in the short term,” it said.

Contrary to its earlier expectations, Motilal sees the risk of Eternal being drawn into a “dogfight”, with lower minimum order values and higher discounts. As a result, it reduced its adjusted EBITDA assumptions by around 15 percent for FY27/28E, and accordingly lowered its target price for the stock to Rs 360 (from Rs 420 earlier), while maintaining its ‘Buy’ call. The latest target price implies an upside potential of nearly 27 percent from the stock’s previous closing price of Rs 283.50 apiece.

Emkay Global sees more competition ahead:

Emkay Global said that Eternal’s Q3 FY25 surprised positively on the profitability front. “The management said that it will respond to competition and is willing to sacrifice margins. We believe that during a land-grab phase, companies should prioritize market share over margins to build scale that can be monetized over time. Eternal’s results underscore that QCom can be highly profitable at scale and Blinkit’s execution remains strong. We expect competitive intensity to increase in the QCom business and Eternal to focus more on market share, which will lead to slower margin expansion in FY27 and FY28,” it said.

The domestic brokerage cut its target price for the stock to Rs 370 per share, implying an upside potential of more than 30.5 percent from the stock’s previous closing price. The firm has a ‘Buy’ rating on the call.

Elara Capital says Deepinder Goyal's move augurs well:

Elara Capital said that the firm’s Q3 headline growth was a tad ahead of estimates on better growth in food delivery and quick commerce. “Deepinder Goyal’s move to the role of Vice Chairman augurs well. He retains strategic oversight and execution is uninterrupted,” the domestic brokerage noted.

It retained its ‘Buy’ call on the stock, with a target price of Rs 415 apiece, implying an upside potential of more than 46 percent.

JM Financial on Eternal:

JM Financial said that the management transition from Goyal to Dhindsa is expected to be smooth, as it elevates a leader with a demonstrated history of scaling a business that now represents the cornerstone of Eternal’s future growth. “Eternal’s primary growth engine, Blinkit, achieved a significant financial milestone in 3QFY26 as it turned Adj. EBITDA breakeven - surpassing our expectations by at least two quarters. This achievement coincided with a pivotal top-leadership restructuring, effective 1st Feb’26,” the domestic brokerage said.

It maintains its conviction that margin expansion will continue, notwithstanding aggressive store expansion plans and ongoing competitive intensity. “We reiterate Eternal as our preferred pick with an unchanged Dec’26 TP of INR 400,” it added.

Axis Securities on Eternal:

From a long-term perspective, Zomato has built a resilient business model by securing multiple strategic verticals and delivering broad-based growth, said Axis Securities. It however added that near-term challenges, such as rising competitive intensity and rapid store expansion, are likely to keep profitability under pressure. “Consequently, we recommend BUY and value the stock at Rs 360/share based on an SOTP valuation, implying a 27% return from the CMP,” it said.

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