SYNOPSIS: Eternal Ltd gained investor attention after Q1FY27 results and positive analyst views from Morgan Stanley, Citi, Jefferies, and Macquarie. While leading brokerages raised targets citing strong growth in food delivery and quick commerce, Macquarie remained cautious on valuations. Revenue, EBITDA, and profitability improved significantly, supporting long-term growth prospects.
The shares of a Large-Cap company specialising in restaurant aggregation and food delivery, quick-commerce, B2B restaurant supply, and digital ticketing for entertainment events are in focus after global giants Morgan Stanley, Citi, Jefferies & Macquarie share their views after their Q1FY27 earnings.
With a market capitalization of Rs. 2,84,444.09 crores in the day’s trade, the shares of Eternal Ltd rose upto 4.2 percent, reaching a high of Rs. 295.55 per share compared to its previous closing price of Rs. 283.40 per share.
What Happened
Eternal Ltd is attracting fresh investor attention as global institutions such as Morgan Stanley, Citi, Jefferies, and Macquarie share their views following the company’s Q1FY27 earnings. With expectations around growth across its restaurant aggregation, food delivery, quick-commerce, B2B supply, and digital ticketing businesses shaping market sentiment, the stock is now in focus as analysts assess its next phase of expansion and profitability outlook.
Morgan Stanley on Eternal
Morgan Stanley maintains an Overweight rating on Eternal and has increased the target price to Rs 373 from Rs 347, supported by strong execution and improving business fundamentals. The brokerage remains confident in the company’s growth outlook, driven by steady momentum in food delivery and quick commerce.
The management’s strategy to sustain growth despite rising competition has been encouraging. Morgan Stanley expects quick commerce to achieve steady-state margins at the upper end of the 5-6% range, while strong Q1 performance and positive management commentary have resulted in higher earnings estimates.
Despite the stock’s strong performance since mid-June, Morgan Stanley believes there is further scope for valuation re-rating. Consistent execution, improving profitability, and confidence in management’s outlook are expected to remain key drivers for the stock’s future performance.
Citi on Eternal
Citi maintains a Buy rating on Eternal and has raised the target price to Rs 385 from Rs 360, citing the company’s strengthening leadership position in quick commerce. The brokerage highlights Eternal’s structural advantages and believes its competitive positioning remains robust.
It believes that discounts alone are unlikely to significantly disrupt Eternal’s market position, given its scale, operational strengths, and customer engagement. The company’s focus on expanding geographically, especially through deeper penetration in next-tier cities, is expected to support future growth.
The improved commentary around competition reflects greater confidence in Eternal’s ability to differentiate itself in the market. Citi expects the company’s strategic execution and strong positioning in quick commerce to continue driving long-term value creation.
Macquarie on Eternal
Macquarie maintains an Underperform rating on Eternal with a target price of Rs 190, acknowledging growth acceleration and resilient margins. However, the brokerage remains cautious about the overall quick commerce economics and believes current valuations may already reflect significant expectations.
It remains watchful on the sustainability of quick commerce profitability and the factors supporting long-term returns. It believes the risk-reward remains unfavorable at current share price levels despite improving business momentum.
Jefferies on Eternal
Jefferies maintains a Buy rating on Eternal and has raised the target price to Rs 415 from Rs 400, highlighting the company’s focus on quality growth over short-term market share gains. The brokerage believes Q1 results reinforced confidence in Eternal’s long-term strategy.
Food delivery performance was stronger than expected, with accelerated growth and improved profitability supporting the positive outlook. The quick commerce business also delivered a favorable outcome, despite falling slightly short of Jefferies’ optimistic expectations.
Jefferies notes that Blinkit is avoiding aggressive short-term discounting and prioritizing sustainable growth. The brokerage believes Eternal’s focus on disciplined execution and differentiated positioning could support long-term value creation, even if competitors expand faster in the near term.
Financials & Others
Its Revenue from Operations increased by 182.0 percent YoY, from Rs. 7,167 crore in Q1 FY26 to Rs. 20,211 crore in Q1 FY27, and increased by 16.9 percent QoQ, from Rs. 17,292 crore in Q4 FY26 to Rs. 20,211 crore in Q1 FY27.
Its Net profit increased by 268.0 percent YoY, from Rs. 25 crore in Q1 FY26 to Rs. 92 crore in Q1 FY27, and decreased by 47.1 percent QoQ, from Rs. 174 crore in Q4 FY26 to Rs. 92 crore in Q1 FY27.
Its EBITDA increased by 416.5 percent YoY, from Rs. 115 crore to Rs. 594 crore, and increased by 22.2 percent QoQ. Its EBITDA Margin increased to 2.94 percent in Q1 FY27, compared to 1.60 percent in Q1 FY26, marking an increase of 1.34 percentage points YoY, and 2.81 percent in Q4 FY26, marking an increase of 0.13 percentage points QoQ.
The company has a low ROCE of 2.97% and ROE of 1.19%, with a debt-to-equity ratio of 0.15, indicating a low leverage position. However, the company has delivered strong profit growth, achieving a 21.6% CAGR over the last five years.
Eternal Limited is an Indian technology company that focuses on building consumer internet businesses. Formerly known as Zomato Limited, the company operates multiple businesses including Zomato, Blinkit, District, and Hyperpure, providing services in food delivery, quick commerce, entertainment, and restaurant supply solutions.
Founded with the vision of using technology to improve everyday experiences, Eternal aims to create innovative platforms that connect consumers, businesses, and service partners. The company continues to expand its presence through digital solutions and customer-focused services across India.
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