Eternal Shares Experience Nearly 4% Gain in Early Trading Following Q4 Results, Brokerages Optimistic About Blinkit-Driven Growth

Eternal Ltd (Zomato) Shares Surge 4% on Strong Q4 Performance

Eternal Ltd (Zomato) shares jumped as much as 4 percent in early trade on Wednesday after the company reported a stronger-than-expected Q4 financial performance. The stock was up 3.65 percent at Rs 262.3 in the early trading. Yesterday, Eternal shares closed at Rs 258.28 with a 1.1 percent gain.

The company's Q4 financial performance was driven by robust growth in its quick-commerce unit Blinkit and steady expansion in food delivery. Eternal reported a 71 percent quarter-on-quarter jump in consolidated net profit to Rs 174 crore for Q4, well ahead of estimates of Rs 121 crore.

Brokerages largely retained bullish ratings on Eternal stock, citing improving profitability and strong growth visibility in quick commerce. The key drivers of growth were Blinkit's net order value (NOV), which rose 95 percent year-on-year, and order growth and monthly transacting users (MTUs) that exceeded expectations.

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Brokerage Views

Brokerages maintained their ratings on Eternal stock despite some variations in their views. CLSA maintained a high-conviction outperform call with a target price of Rs 505 per share, citing the strength of Blinkit's business model. Jefferies retained its buy rating but cut its target price to Rs 400 per share, highlighting further improvement in quick commerce profitability. HSBC also maintained a buy call with a target price of Rs 300 per share, flagging that Q4 performance was slightly below expectations.

InCred Capital reiterated its add rating with a target price of Rs 383 per share, citing strong leadership position and improving unit economics. However, it flagged rising competitive intensity as a key risk. DAM Capital maintained a buy call with a target price of Rs 330 per share, citing strong growth led by quick commerce, where Blinkit has already turned adjusted EBITDA profitable.

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The brokerages expect a positive outlook for Eternal Ltd (Zomato) in the near term, driven by the growth of its quick-commerce unit Blinkit and steady expansion in food delivery.