While the broader stock market traded in the red on July 23, shares of Eternal Ltd (formerly Zomato) bucked the trend and emerged among the top gainers on the Nifty 50.
The stock climbed nearly 3% to ₹293 after the company announced its Q1 FY2026-27 results, with investors taking comfort from positive commentary by leading brokerage firms.
Despite quarterly profit coming in below market expectations, analysts remained optimistic, citing strong execution in the company's food delivery and quick commerce businesses.
Why Did Eternal Shares Rise?
Brokerages focused less on the earnings miss and more on the company's long-term growth drivers.
According to analysts, the key positives include:
Strong growth in the food delivery business
Continued expansion of Blinkit's quick commerce operations
Improving profitability at Blinkit
Management's confidence that competitive intensity remains manageable
Healthy long-term growth outlook
These factors helped boost investor confidence despite softer quarterly profit.
Eternal Q1 Results: What Impressed Analysts?
Although Eternal's net profit missed estimates, brokerages highlighted the company's improving operational performance.
Analysts believe the company's investment strategy in quick commerce is beginning to deliver results, while the food delivery segment continues to generate steady growth.
Management also reassured investors that competition remains under control, easing concerns over pricing pressure.
Brokerages Remain Bullish on Eternal
Following the Q1 results, several global brokerage firms reiterated positive ratings and raised confidence in the stock.
CLSA
Rating: High Conviction Outperform
Target Price: ₹506
Potential Upside: Around 75%
CLSA remains the most bullish brokerage, expecting significant upside from current levels.
JPMorgan
Rating: Overweight
Target Price: ₹390
Potential Upside: Around 35%
The brokerage continues to see strong long-term growth prospects.
Jefferies
Rating: Buy
Target Price: ₹415
Potential Upside: Around 43%
Jefferies remains optimistic about Eternal's execution across business segments.
Nomura
Rating: Buy
Target Price: ₹350
Potential Upside: Around 21%
Nomura expects sustained growth in the company's core businesses.
HSBC
Rating: Buy
Target Price: ₹340
Potential Upside: Around 17%
HSBC believes improving operating metrics support the company's long-term valuation.
Blinkit Continues to Be a Key Growth Driver
Brokerages believe Blinkit remains one of Eternal's biggest long-term opportunities.
Key positives include:
Better profitability
Higher order volumes
Expanding dark store network
Improving operational efficiency
The quick commerce business is increasingly becoming an important contributor to the company's future earnings.
Why Investors Are Optimistic
Market participants remain positive because of:
Strong food delivery growth
Improving Blinkit margins
Healthy revenue momentum
Stable competitive environment
Positive management commentary
Bullish brokerage target prices
These factors outweighed concerns over the quarterly earnings miss.
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