Eternal Shares Jump 4% After Q1 Results

Eternal Ltd, the parent company of Zomato, saw its shares rise over 4% to Rs 295 in early trade on Thursday, despite a weak broader market. This increase made it the top gainer on the Nifty 50.

The rise in shares came as a response to favourable views from brokerages following the company's June quarter earnings. Brokerages looked beyond the weaker-than-expected profit performance and focused on the company's strong operational execution across its food delivery and quick commerce segments.

Eternal reported a consolidated net profit of Rs 92 crore for the first quarter of FY27, which was a decline of 47% from the previous quarter but a significant increase from the Rs 25 crore reported in the year-ago period. The company's revenue performance, however, remained strong, with consolidated revenue standing at Rs 20,211 crore, exceeding the poll estimate of Rs 19,850 crore.

The revenue increased by 17% quarter-on-quarter from Rs 17,292 crore and more than doubled from Rs 7,167 crore in the same period last year. The company's EBITDA rose 22% sequentially to Rs 594 crore, while the EBITDA margin improved slightly to 2.9% from 2.8% in the previous quarter.

Brokerages maintained a positive outlook on Eternal, citing sustained momentum in its core businesses. Analysts pointed to Blinkit's rapid expansion, improving profitability trends, and disciplined execution as key factors supporting future growth.

Market experts also noted that competitive intensity in the quick commerce segment appears to be stabilising. Management's confidence regarding the business environment and the revised long-term EBITDA margin outlook for Blinkit have further strengthened expectations of improved profitability over the medium term.

The strong operational execution and favourable brokerage views have contributed to the increase in Eternal's shares. The company's ability to maintain momentum in its core businesses and improve profitability will be crucial in determining its future growth.

In the context of the Indian food delivery and quick commerce market, Eternal's performance is significant. The company's strong revenue growth and improving profitability trends indicate a positive outlook for the industry.

Overall, the rise in Eternal's shares reflects the company's strong operational execution and favourable brokerage views. The company's ability to maintain momentum in its core businesses and improve profitability will be crucial in determining its future growth.

The increase in Eternal's shares is also a reflection of the company's potential for long-term growth. With the Indian food delivery and quick commerce market expected to continue growing, Eternal is well-positioned to benefit from this trend.

In conclusion, the rise in Eternal's shares is a positive development for the company and its investors. The company's strong operational execution, favourable brokerage views, and potential for long-term growth make it an attractive investment opportunity.

The significance of this development for Mumbai and India is that it indicates a positive outlook for the food delivery and quick commerce industry. The growth of this industry is expected to create new job opportunities and contribute to the country's economic growth.