Mumbai – Shares of Eternal, the parent company of food delivery platform Zomato and quick commerce service Blinkit, experienced notable volatility on Thursday, January 22. The stock surged by 7% in early trading, reaching an intra-day high of Rs 304.20, following robust Q3FY26 financial results. However, this rally was short-lived, as the stock reversed course and declined as much as 2%, hitting a low of Rs 276.00 during the trading session.
Strong Q3FY26 Performance Boosts Investor Sentiment
Eternal reported a significant jump in its Q3FY26 earnings, with consolidated net profit soaring 73% year-on-year (YoY) to Rs 102 crore. The company’s revenue from operations skyrocketed 201% YoY to Rs 16,315 crore, driven primarily by growth in its quick commerce segment. The company also noted a 64% YoY like-for-like revenue growth during the quarter.
Consolidated EBITDA increased 28% YoY to Rs 364 crore, with a sequential growth of 63%. Anand Rathi brokerage highlighted the company’s strong execution, particularly in the quick commerce segment, noting Blinkit achieved adjusted EBITDA profitability for the first time, despite intense competition.
Impact of Leadership Changes and Future Outlook
The stock’s recent swings come amid the resignation of Deepinder Goyal as MD and CEO of Eternal Group, effective February 1. Despite leadership changes, brokerage firm Anand Rathi maintains a bullish outlook, reiterating a ‘BUY’ rating with a target price of Rs 400. The firm believes that segment heads’ autonomy will mitigate any adverse effects from Goyal’s departure.
Eternal’s management remains optimistic about its growth trajectory across various segments:
- Food Delivery: Aiming for approximately 20% YoY growth over the long term.
- Quick Commerce: With around 2,027 dark stores operational, the company targets reaching 3,000 to 4,000 stores by March 2027.
- Hyperpure: Projected to achieve a $1 billion topline within three years, with a 25-30% CAGR.
- Going Out: Expecting to reduce losses and reach breakeven within 4-6 quarters, with plans to generate $3 billion in NOV and a 5% EBITDA margin by FY30.
Brokerage Forecasts and Risks
Analyst estimates project Eternal’s revenue to grow at a CAGR of approximately 58.3% from FY26 to FY28, with each segment contributing to this expansion. The company anticipates EBITDA of Rs 35 billion by FY28, supported by strong growth in food delivery, quick commerce, and other segments.
However, risks remain. Intense competition from players like Zepto, Swiggy, Flipkart Minuts, BB Now, and Amazon poses a threat to market share. Cost escalation due to increasing rentals for dark stores and delivery infrastructure could impact profitability. Additionally, a possible slowdown in consumer spending may affect the food delivery segment’s growth outlook.
Investors are advised to watch these developments closely as Eternal navigates a competitive environment while focusing on operational efficiency and expansion plans.
