Zomato Parent Eternal's Share Price Zooms Post Q1: Five Key Drivers Behind The Rally

Shares of Eternal Ltd, the parent company of Zomato and Blinkit, rallied 13.62% on Tuesday following its first-quarter earnings announcement, driven by stronger-than-expected revenue growth, narrowing losses in key verticals, and bullish commentary from brokerages. The stock also saw heightened activity, with 2.6 million shares changing hands in a block deal, signaling strong institutional interest.

The company reported a 23% quarter-on-quarter jump in revenue to Rs 7,167 crore for the April–June period, beating analyst estimates of Rs 6,624 crore. While net profit fell 36% sequentially to Rs 25 crore—missing consensus forecasts—the market appeared to focus on operational improvements and growth visibility in its quick commerce and B2B segments.

Here are five key reasons behind Eternal's sharp stock rally:

Eternal's Top Line Growth

Eternal's top-line growth exceeded expectations, with consolidated adjusted revenue rising 22% quarter-on-quarter and 70% year-on-year. This was largely driven by strong performance in Blinkit and Hyperpure, its quick commerce and B2B supply arms respectively. The company's B2C vertical now generates nearly $10 billion in annualised net order value (NOV), with Blinkit contributing nearly half.

Losses Narrow In Blinkit and Hyperpure

Despite missing profit estimates, Eternal showed sequential improvement in profitability. Ebitda rose 60% to rS 115 crore, and losses in Blinkit and Hyperpure narrowed, indicating better cost control and operating leverage. Brokerages noted that the company is no longer burning cash at the EBITDA level, thanks to strong cash generation in its core food delivery business.

Blinkit Gains Market Share

Blinkit's gross order value (GOV) surged 25.5% quarter-on-quarter to Rs 11,820 crore, with monthly transacting customers rising 122% year-on-year. The average order value also grew 7.1%, reflecting deeper customer engagement. Despite intense competition, Blinkit continues to expand its footprint and consolidate its position in the quick commerce space.

Zomato Management Sees Expansion Beyond Guidance

Eternal's management surprised the market by indicating visibility of up to 3,000 dark stores in the future—well above the previously guided number of 2,000. This signals long-term confidence in Blinkit's scalability and profitability, especially as the company transitions to an inventory-led model.

Eternal: Brokerages Maintain Bullish Outlook

Several brokerages, including Nomura, Nuvama, and Motilal Oswal, raised their target prices on Eternal, citing stabilizing losses and improving margins in Blinkit. Nomura lifted its target to Rs 300, while Nuvama and Motilal Oswal revised theirs to Rs 320 and Rs 310 respectively. However, Macquarie remained cautious, flagging rising costs and valuation concerns

While the earnings report was mixed—with a miss on net profit and margin expectations—the Street appears to be rewarding Eternal for its operational momentum and strategic clarity.