Eternal shares clock all-time high after Q1 results; brokerages up target

Eternal, Zomato Q1 results review: Brokerages raised their target on Eternal, as they reckon that quick commerce losses have now started to stabilise

Eternal, Zomato Q1 results review: Shares of Eternal, the parent company of food delivery platform Zomato and quick-commerce firm Blinkit, surged 14.8 per cent on Tuesday, reaching an all-time high of ₹311.6 on the BSE with the market capitalisation hitting the Rs 3 trillion mark in intra-day deals.

 

The rally followed the announcement of the company’s Q1FY26 earnings on Monday. In contrast, the BSE Sensex saw a modest uptick of 0.17 per cent at 82,338 levels.

Earnings Snapshot: Revenue Surges, Profit Dips

Despite a sharp drop in quarterly net profit, Eternal’s stock, according to analysts, attracted investor interest, driven by the stabilisation of its quick commerce business. The company reported a net profit of ₹25 crore for Q1FY26, significantly lower than ₹253 crore reported in the same quarter last year. However, revenue jumped 70.3 per cent year-on-year to ₹7,167 crore, compared to ₹4,206 crore a year earlier.

 

 

Further, consolidated adjusted revenue stood at ₹7,563 crore, marking a 67 per cent increase year-on-year and a 22 per cent rise quarter-on-quarter. On the profitability front, adjusted EBITDA came in at ₹172 crore, representing a 42 per cent year-on-year decline.

 

Eternal also highlighted that its business-to-consumer (B2C) vertical now delivers close to $10 billion in annualised net order value (NOV), with the quick commerce segment contributing nearly half, thereby emerging as the company’s largest B2C business. 

Quick Commerce

The quick commerce arm, Blinkit, was a major growth driver in the quarter. Gross order value (GOV) for Blinkit rose to ₹11,820 crore — a robust 25.5 per cent increase quarter-on-quarter and a massive 140.1 per cent surge year-on-year.

 

This growth was attributed to a significant rise of around 122 per cent year-on-year in monthly transacting customers. Additionally, the average order value (AOV) in the quick commerce segment improved by 7.1 per cent compared to the same period last year.

 

Although the pace of new dark store additions moderated to 243 in Q1FY26 from 294 in the previous quarter, the total store count increased to 1,544, supporting Blinkit's expanding footprint and operational scale.

Brokerage view

Brokerages mostly responded positively to the earnings, upgrading targets and reaffirming buy ratings based on improved metrics and future potential. Nomura retained its 'Buy' rating on Eternal and raised the target price to ₹300 from ₹280, citing stronger profitability in the quick commerce business and a lack of cash burn at the EBITDA level, thanks to robust cash flows from the core food delivery segment.

 

Nuvama Institutional Equities also maintained a 'Buy' call and revised its target price upward to ₹320 from ₹290. The brokerage noted that margins in the quick commerce segment are likely to improve due to the company’s transition to an inventory-led model and the maturation of newly added dark stores, which are expected to deliver stronger operating leverage.

 

Motilal Oswal echoed this sentiment, raising its target price to ₹310 while continuing to recommend a 'Buy'. It credited Blinkit as the primary growth engine during the quarter and projected further stabilisation in the quick commerce space. ICICI Securities similarly hiked its target to ₹315 from ₹310, maintaining a 'Buy' rating based on the consistent growth of the quick commerce segment and encouraging commentary from company management.

 

Jefferies took an even more optimistic stance, upgrading its rating from 'Hold' to 'Buy' and increasing its target price to ₹400 from ₹250. The upgrade was driven by the brokerage’s confidence in the company’s strategic direction, supported by strong and positive management commentary.

 

Meanwhile, Eternal’s management remains confident of delivering 15 per cent NOV growth for FY26. While the contribution margin from food delivery declined slightly to 9.9 per cent in Q1 from 10.3 per cent in the previous quarter, management pointed to encouraging trends such as higher app engagement, increased refresh rates, and the return of customers to the platform — all of which signal a likely improvement in earnings for Q2FY26.

 

However, not all brokerages share this bullish view. Macquarie, for instance, has maintained its 'Underperform' rating and kept its target price at ₹150. The brokerage continues to express concerns about heightened competitive pressures and foresees a prolonged period of losses for Eternal, especially in the evolving and highly contested quick commerce market.