Shares of Zomato-parent Eternal Ltd. rose over 7% in early trade on Thursday to nearly hit a two-month high after the company confirmed Deepinder Goyal will step down as Group CEO and will be replaced by BlinkIt's top boss, Albinder Dhindsa.
Eternal also saw 3.34 million shares exchange hands in a block deal Thursday morning. As far as Eternal's Q3 results are concerned, the company's net profit nearly doubled in the third quarter of the current financial year, even as it missed street expectations. Margin improvement came from supply chain cost efficiencies, a favourable shift towards long tail categories and operating leverage, the company said.
Brokerages were split on Eternal, even as Blinkit's performance took centre stage this quarter.
Macquarie stayed cautious, maintaining an Underperform with a target price of Rs 200. While it acknowledged improved Blinkit optics with a contribution margin uplift, the brokerage flagged that adjusted Ebitda hit breakeven largely due to an accounting shift. After finance costs, Blinkit continues to make losses. Management's tempered near-term growth and margin outlook, coupled with what it called irrational competitive dynamics, underpin Macquarie's cautious stance.
On the other hand, UBS retained its Buy rating with a target of Rs 375, citing Blinkit's breakeven and improving growth in the food delivery business. UBS described Q3 numbers as strong, with guidance broadly constructive, though it flagged competitive intensity as a key factor to monitor.
Jefferies was the most bullish, maintaining a Buy with a target of Rs 480. It highlighted Blinkit's positive Ebitda even amid peak competition, aided by higher average order value, mix improvement and a shift to a 1P model. Jefferies said past investments are now paying off and does not expect recent management changes to impact near-term execution.
Eternal Q3 Results (Consolidated, YoY)
- Revenue Rs 16,315 crore vs Rs 5405 crore (Bloomberg estimate: Rs 16,224 crore)
- Ebitda Rs 368 crore vs Rs 162 crore (Estimate: Rs 333 crore)
- Margin at 2.3% vs 3% (Estimate: 2.1%)
- Profit at Rs 102 crore vs Rs 59 crore (Estimate: Rs 115 crore)
Eternal Share Price Today
Shares of Eternal rose as high as 7.85% to Rs 305 apiece. The stock has pared gains to trade 0.78% higher at Rs 285 apiece, as compared to a 0.99% advance in the benchmark Nifty 50.
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