Eternal Ltd., the parent company of leading food delivery platform Zomato, is on brokerages' radar as the company posted an over fourfold jump in consolidated net profit in the fourth quarter of fiscal 2025-26. The bottomline came in at Rs 174 crore, compared to Rs 39 crore, according to a stock exchange filing on Tuesday. Eternal reported a steady operational performance in fourth quarter, with strong growth in quick commerce and food delivery businesses, alongside improving profitability metrics across segments.
Eternal Q4 Highlights (Consolidated, YoY)
- Revenue up 196.5% to Rs 17,292 crore versus Rs 5,833 crore (Estimate: Rs 18,099 crore)
- Ebitda up 575% to Rs 486 crore versus Rs 72 crore (Estimate: Rs 431 crore)
- Margin at 2.8% versus 1.2% (Estimate: 2.4%)
- Net profit up 346% to Rs 174 crore versus Rs 39 crore (Estimate: Rs 126 crore)
Brokerages maintain a largely constructive stance on Eternal, with the exception of one Underperform rating from Macquarie. Citi maintains a Buy rating, but trims its target to Rs 360, whereas Morgan Stanley is more upbeat, with an Overweight rating and a hike in the target price to Rs 347. Investec also stays positive with a Buy rating, and a Rs 375 target. UBS echoes the sentiment with another Buy call, and a Rs 310 target price. Macquarie remains cautious with an Underperform rating and a Rs 200 target, warning of slowing expansion, and elevated competitive intensity.
Citi on Eternal
- Citi maintains a Buy rating and cuts the target price to Rs 360 from Rs 400.
- Q4 performance was in line, with revised guidance offering near-term flexibility.
- Eternal continues to strengthen its first-mover advantage across smaller cities.
- The company is solidifying its leadership in quick commerce.
- Structural advantages remain strong, with customer discounts unlikely to materially disrupt its position.
Morgan Stanley on Eternal
- Morgan Stanley maintains an Overweight rating and hikes the target price to Rs 347 from Rs 345.
- Focus remains on profitable growth.
- Macro impact has been negligible so far.
- Management sees quick commerce NOV CAGR of 60%+ YoY, with an adjusted EBITDA outlook of $1 billion by FY29.
- While the Street reaction to Q4 may be mixed, underlying metrics remain strong.
- Quick commerce growth outlook should support current estimates.
Investec on Eternal
- Investec maintains a Buy rating with a target price of Rs 375.
- Visibility on future growth is improving.
- Food delivery and quick commerce continue to perform strongly.
- District and Hyperpure businesses remain steady, supported by a healthy cash surplus.
- Near-term volatility from competitive intensity cannot be ruled out, but execution remains strong.
UBS on Eternal
- UBS maintains a Buy rating with a target price of Rs 310.
- Q4FY26 performance was steady.
- Food delivery growth is gradually inching towards the 20% mark.
- Quick commerce growth has moderated slightly, but profitability is improving despite competition.
- The company has laid out solid medium-term growth aspirations.
Macquarie on Eternal
- Macquarie maintains an Underperform rating with a target price of Rs 200.
- Sequential growth has moderated despite optimistic guidance.
- The brokerage sees downside risks to throughput improvements.
- Dark store expansion is expected to slow.
- Competitive intensity is likely to remain elevated, pressuring unit economics at a micro-market level.
- It cautions against extrapolating success in select markets like Delhi to a pan-India scale.
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