Eternal shares in focus after strong Q1 revenue growth. Should you buy, sell or hold?
Eternal
, the parent company of
Zomato
and
Blinkit
, will be in focus on Tuesday after the firm reported a sharp 90% year-on-year (YoY) decline in consolidated net profit for Q1FY26. Net profit stood at Rs 25 crore, compared to Rs 253 crore in the same quarter last year.
Despite the drop in profit, revenue from operations rose 70% YoY to Rs 7,167 crore, led by strong performance in
quick commerce
and food delivery segments.
Profit hit by investments in quick commerce and going-out segments
Akshant Goyal, CFO of Zomato, said the fall in profitability was mainly due to continued investments in quick commerce and the going-out vertical. Consolidated adjusted EBITDA dropped 42% YoY to Rs 172 crore, although food delivery EBITDA margin improved to 5.0% from 3.9% a year earlier.
The company said net order value (NOV) of its B2C businesses grew 55% YoY and 16% sequentially to Rs 20,183 crore. For the first time, quick commerce NOV surpassed food delivery NOV for a full quarter.
'On an annualised basis, we are now at nearly $10 billion in NOV across our B2C businesses, with quick commerce becoming our largest segment—contributing almost half of the annualised NOV,' Eternal said in its shareholder letter.
Adjusted revenue rose 67% YoY and 22% quarter-on-quarter (QoQ) to Rs 7,563 crore. Meanwhile, B2B unit Hyperpure posted 89% YoY revenue growth, though management expects a near-term slowdown in this segment.
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Should you buy, sell, or hold Eternal's stock? Here's what brokerages say:
Motilal Oswal
MOSL maintained a 'Buy' rating and raised the target price to Rs 330 from Rs 310.
The brokerage said quick commerce losses are stabilizing and Blinkit's strong growth—GOV up 140% YoY—is driving momentum. However, PAT missed estimates (Rs 25 crore vs Rs 270 crore expected). Despite this, MOSL expects 2QFY26 revenue and adjusted EBITDA to grow 66% and 15% YoY, respectively.
Elara
Elara also retained a 'Buy' call, raising the target price to Rs 340 from Rs 300.
It highlighted food delivery GOV hitting a three-quarter high and projected margins growing at 19.2% CAGR from FY25–28E. Elara raised revenue estimates by 3.5–6% on quick commerce strength but cut EPS forecasts by 4–17% over FY25–28E due to losses in other segments.
Nuvama
Nuvama raised its target price to Rs 320 from Rs 290 while maintaining a 'Buy' rating.
It revised FY26E and FY27E earnings upward by 1.4% and 8.4%, respectively, and pointed to Blinkit's profitability and inventory-led model as margin drivers. Management expects margin gains ahead, assuming stable market competition.
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(
Disclaimer
: Recommendations, sugestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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