Eternal extends rally; stock soars 8% in two days post Q2 results

Analysts at Axis Securities recommended 'BUY' on Eternal with a target price of ₹365 per share based on an SOTP valuation.

Eternal share price movement

 

Share price of Eternal, the parent firm of food-delivery (FD) marketplace Zomato and quick commerce (QC) platform Blinkit, extended its up move, gaining 3.4 per cent to ₹327.80 on the BSE in Monday’s intraday trade. In the past two trading days, the stock rallied 8 per cent after the company delivered a strong performance for the July-September quarter (Q2FY27).

 

At 01:57 PM, Eternal quoted 3 per cent higher at ₹325.75, compared to a 0.50 per cent rise in the BSE Sensex. The stock hit a 52-week high of ₹344.75 on September 23, 2026.

 

About Eternal

 

Eternal (formerly Zomato) is an Indian multinational technology and consumer-services holding company based in Gurugram, Haryana. It operates as the parent entity for several digital platforms in India, including the restaurant aggregator and food delivery service Zomato, the quick-commerce grocery delivery service Blinkit, the business-to-business (B2B) food supply platform Hyperpure, and the live events and online ticketing platform District.

 

 

Axis Securities recommends ‘buy’ on Eternal with target price of ₹365 per share

 

Higher discounting to drive customer acquisition and order frequency is delivering positive outcomes in user growth and engagement. Earnings before interest, tax, depreciation and amortization (EBITDA) margins are likely to remain broadly flattish over the next 1–2 years as the company prioritises market expansion and absolute adjusted EBITDA growth. 

 

Analysts at Axis Securities believe such investments are strategic and position the company for stronger earnings growth over the medium to long term. The brokerage firm recommends a BUY on the stock with a target price of ₹365/share based on an SOTP valuation.

 

Blinkit remains the key growth catalyst with aggressive store expansion. Blinkit’s quick commerce net order value (NOV) grew 79.3 per cent year-on-year (YoY) and 22.2 per cent quarter-on-quarter (QoQ) to ₹20,940 crore in the September 2026 quarter (Q2FY27), supported by 399 million orders and 37 million monthly customers, with NOV per store per day up 17 per cent YoY to ₹9 lakh against the steady-state target of ₹11 lakh. 

 

The management raised its store target to 3,500+ by March 2027 (from 3,000) and 5,000 by March 2028, with most additions in smaller cities and newer categories. These stores are reaching 1,000 daily orders at a pace similar to metro stores, with average order values at 85–90 per cent of metro levels and similar customer retention, while capex remains at a blended ₹2.5 crore per store. The long-term target of $1 billion EBITDA by FY29 remains unchanged, the brokerage firm said in it’s Diwali Mahurat Picks : Samvat 2023.

 

Meanwhile, food delivery NOV grew 21.5 per cent YoY to ₹11,445 crore with adjusted EBITDA of ₹627 crore (5.5 per cent margin vs 5.6 per cent in Q1), and monthly transacting customers rose 16 per cent YoY to 28 million. Margins are expected to remain broadly stable over the next 1–2 years as management focuses on growing absolute EBITDA. 

 

District’s NOV grew 58 per cent YoY to ₹3,259 crore, with management confident of its FY30 target of ₹28,000 crore NOV and ₹1,400 crore adjusted EBITDA, while Hyperpure’s revenue grew 22.7 per cent YoY to ₹1,154 crore, serving 85,000 restaurants.

 

Further, Eternal is developing enterprise AI capabilities, including Nugget, while prioritizing technology investments over expanding into additional physical service lines. 

 

Management introduced Dark.ai (a privacy-focused AI platform designed to improve employee productivity and automate internal workflows), a potential multi-billion-dollar opportunity, while remaining prepared to discontinue the initiative if it fails to gain traction. 

 

Separately, the Zomato app's AI chatbot is undergoing product changes, although users currently continue to prefer visual browsing over conversational ordering. Such investments are expected to improve user experience and provide clear practical benefits.

 

Dark.ai is a privacy-focused AI assistant built using fine-tuned open-weight models on Eternal’s own infrastructure. It is aimed at power users and is expected to launch globally in 2026. Current costs are low and included under Others, while any increase in spending would mainly be on hardware and computing. 

 

Management sees Dark.ai as a high-risk initiative and plans to discontinue it if it fails to gain traction. The next 12 months should also provide more clarity on the growth potential of Nugget and other AI initiatives, Axis Securities said. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.