Shares of Eternal Ltd (Zomato’s parent) rallied 15 per cent in early trade on Tuesday on strong Q1FY26 revenue, beating Street estimates. The rally was further supported by a wave of brokerage upgrades and increased target prices.
Its revenue from operations surged 70 per cent to ₹7,167 crore. However, it posted a net profit of ₹25 crore in the June quarter, down 90 per cent y-o-y.
Analysts remain broadly optimistic, citing long-term growth potential of Blinkit’s quick commerce (q-comm) business and stable food delivery segment.
Upgrades
Jefferies upgraded the stock from hold to buy at a higher target price of ₹400 per share. Citi has maintained a buy and Bernstein has retained an outperform rating at an increased target price of ₹320 each.
Motilal Oswal highlighted that Eternal’s core food delivery business remains stable and sees Blinkit as a “generational opportunity” for Eternal to disrupt traditional industries such as grocery, retail and e-commerce. The domestic brokerage reiterated buy at an increased target price of ₹330, highlighting Eternal’s Q1 revenue was up 70 per cent, above its estimates of 62 per cent y-o-y.
Motilal lowered FY26 and FY27 estimates by 14 and 18 per cent, respectively, factoring in continued dark store expansion and FY26 losses from newer initiatives such as Bistro (10-minute food delivery) and Nugget.
Emkay Global pointed out operational transitions in the quick commerce model. Eternal is expected to shift from a marketplace model to an inventory-led approach over the next 2–3 quarters. This move is projected to expand margins by approximately 100 bps, though it would require working capital support of around 18 days. Emkay also noted that management sees potential to nearly double store count from 1,544 to 3,000 across cities, supporting long-term scalability.
It believes Blinkit is capitalising well on the q-comm growth opportunity but expects EBITDA breakeven to remain some time away, given the current “landgrab” phase. Emkay has retained a buy rating at a revised target price of ₹330 from ₹290 earlier.
Nuvama praised Blinkit for “shining out on growth and profitability. The brokerage sees margin improvement ahead, supported by a shift to an inventory-led model, operating leverage and maturing dark stores. It has maintained a buy call at a raised target price of ₹320.
Meanwhile, Macquarie retained underperform rating at ₹150 target price per share.
Eternal stock traded 9.24 per cent higher at ₹296.25 on the BSE as at 10.37 am, hitting an intraday high of ₹311.60 against previous close of ₹271.20.
Its rival Swiggy also traded in positive range, up 3.19 per cent at ₹408.10.
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Published on July 22, 2025