Business
Eternal shares tumble 9% from day's high with management transition in focus, brokerages' concerns over competition
Eternal shares tumble 9% from day's high with management transition in focus, brokerages' concerns over competition
About this update from Eternal Limited
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 profitabi...