Eternal shares surge over 8% in just two days amid investor optimism and strategic developments. Here’s what’s driving the stock price rally.
🚀 Eternal Shares Jump 8% in 2 Days: What’s Fueling the Rally?
Mumbai | June 6, 2025 —
Shares of Eternal Ltd (formerly known as Zomato) surged by more than 8% over the past two trading sessions, riding a wave of investor optimism. The rally comes amid two major developments: a strategic cap on foreign ownership and a stellar revenue performance from its fast-growing unit, Blinkit.
The stock’s momentum is seen as a vote of confidence from the market, especially institutional investors, even as the company reported a sharp decline in net profits for Q4 FY25.
📊 Trending Headline: Q4 FY25 Results — Strong Revenue, Weak Profit
Eternal’s Q4 earnings reveal a mixed performance:
- Revenue: ₹5,833 crore (↑64% YoY)
- Net Profit: ₹39 crore (↓78% YoY)
- EBITDA: ₹72 crore (↓16% YoY)
While profits took a hit due to expansion costs and operational expenditures, Blinkit, Eternal’s quick commerce arm, was the highlight. It posted ₹1,709 crore in revenue, more than double from last year.
📌 “Blinkit is the biggest value unlocker in Eternal’s growth story right now,” said an ICICI Securities analyst.
🏪 Blinkit Expansion Fuels Optimism
The fast-paced growth of Blinkit played a pivotal role in the company’s revenue surge. Eternal doubled Blinkit’s store network to 1,301 locations, boosting its gross order value significantly.
Key Performance Metrics:
- Gross Order Value (GOV): Robust growth across metros
- Store Network: Expanded from 706 to 1,301 stores
- Market Position: Strengthening lead over rivals like Swiggy Instamart and Zepto
This scale and speed of execution have made Blinkit the crown jewel of Eternal’s portfolio.
🌐 Strategic Move: Foreign Ownership Capped at 49.5%
One of the biggest headlines around Eternal this quarter is its decision to cap foreign ownership at 49.5%, down from the previous 75%.
The move is designed to classify Eternal as an Indian-Owned and Controlled Company (IOCC), which will allow Blinkit to operate under an inventory-based model — a model currently prohibited for foreign-owned e-commerce entities.
This strategic realignment opens up avenues for greater supply chain control, improved margins, and long-term scalability.
📢 Eternal Shares has already received board approval for this cap and will seek shareholder nod soon.
📉 Why Did Net Profit Fall Despite Higher Revenue?
While the topline has grown impressively, the bottom-line pressure is due to:
- Aggressive store rollouts
- Increased operating expenses
- Competitive discounting in the quick commerce space
Analysts, however, view this as “growth-led pain” and believe margins will stabilize as Blinkit matures.
📈 Analyst Insights: Morgan Stanley, Others Remain Bullish
Morgan Stanley maintained its “Overweight” rating on Eternal and raised its price target to ₹320 per share.
Top Reasons Behind Bullish Sentiment:
- Solid Q4 topline despite profit drop
- Blinkit’s long-term market potential
- Limited future equity dilution risk
- Strategic positioning with IOCC status
✅ “We see strong upside potential in Eternal over the next 12 months,” said a Morgan Stanley note.
🏦 Analyst Take: Morgan Stanley Sets ₹320 Target
Global brokerage Morgan Stanley remains bullish on Eternal, citing:
-
Strong revenue momentum
-
Blinkit’s scale advantage
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Strategic restructuring to unlock regulatory flexibility
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Low risk of future equity dilution
They’ve maintained an Overweight rating with a target price of ₹320 per share.
💼 Institutional Investors Back the Rally
Around 46% of Eternal’s shares are held by institutional investors, who appear unfazed by short-term earnings volatility.
The rising stock price suggests continued belief in the company’s long-term strategic direction — particularly its full-stack commerce ambition via Blinkit.
📌 Summary of Key Developments
| Factor | Impact |
|---|---|
| Blinkit Expansion | Boosted revenue; doubled store count |
| Ownership Cap at 49.5% | Enables inventory-led model |
| Q4 Revenue ↑ 64% | Strong operational growth |
| Net Profit ↓ 78% | Due to expansion costs |
| Analyst Outlook | Bullish with ₹320 target (Morgan Stanley) |
❓ FAQs: Eternal Shares Price Surge
Q1: Why did Eternal shares rise over 8% recently?
A1: The rally is driven by strong revenue from Blinkit and a strategic cap on foreign ownership, which enhances regulatory flexibility.
Q2: What is the benefit of the foreign ownership cap?
A2: It enables Eternal to qualify as an IOCC, allowing Blinkit to adopt an inventory-based e-commerce model, improving supply chain control.
Q3: Why did profits drop despite higher revenue?
A3: High expenses from Blinkit’s rapid expansion and competitive pricing led to lower margins in the short term.
Q4: What are analysts saying about Eternal Shares?
A4: Analysts, including Morgan Stanley, remain optimistic and have set a bullish target price of ₹320 per share.
Q5: What is Blinkit’s role in Eternal Shares business?
A5: Blinkit is the fastest-growing segment and a key revenue driver, positioning Eternal Shares as a leader in the quick commerce space.
💬 Call to Action:
What do you think about Eternal Shares strategic transformation and Blinkit’s future?
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