Eternal, the company formerly known as Zomato, has seen its stock price climb by more than 8% in just two days. On Thursday, the stock rose over 5%, reaching a high of Rs 258.3 on the National Stock Exchange (NSE). Let’s break down why this is happening in simple terms.
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Strong Trading and Market Confidence
The stock’s rise was fueled by a huge number of shares being traded—about 4.15 crore shares worth Rs 1,055.7 crore changed hands in a single day. This shows that investors are excited about Eternal’s future.
A big reason for this excitement is a report from Morgan Stanley, a well-known financial firm. They gave Eternal an “Overweight” rating, which means they think the stock is a great buy. They also set a target price of Rs 320 per share, suggesting there’s room for the stock to grow even more.
Why Morgan Stanley Loves Eternal
Morgan Stanley believes Eternal is a top choice for investors. Here’s why:
Leading the Market
Eternal is a leader in both food delivery and quick commerce (fast delivery of groceries and essentials). This makes it stand out from competitors.
H3: Strong Finances
The company has a solid financial setup. It spends money wisely, which helps it make more profit per order compared to other companies. Plus, Eternal has a strong balance sheet, meaning it’s unlikely to need extra funds that could lower the stock’s value.
Bright Future
Morgan Stanley thinks Eternal’s stock has a good balance of risk and reward. Even if things don’t go perfectly, they believe the stock price won’t fall below Rs 200–220.
Quick Commerce is Booming
Morgan Stanley also raised its predictions for India’s quick commerce market. They now expect it to grow to $57 billion by 2030, up from their earlier guess of $42 billion. This is because more people are using quick commerce, and Eternal is expanding to more cities beyond big metros like Delhi and Mumbai. The company is also seeing strong growth in its gross order value (GOV), which measures the total value of orders placed.
Eternal’s Financial Performance in Q4
In the January–March 2025 quarter (Q4 FY25), Eternal reported mixed results:
- Profit: The company’s net profit dropped significantly by 77.7% to Rs 39 crore, compared to Rs 175 crore in the same quarter last year.
- Revenue: Sales grew impressively by 63.8%, reaching Rs 5,833 crore, up from Rs 3,562 crore a year ago.
- EBITDA: This measures the company’s operating profit, which fell 16.3% to Rs 72 crore from Rs 86 crore. The EBITDA margin (a measure of profitability) also dropped slightly to 1.23% from 2.41%.
Despite the profit dip, the strong revenue growth shows Eternal is expanding its business.
How Has the Stock Performed?
As of 10:16 AM on Thursday, Eternal’s stock was trading at Rs 258.3 on the Bombay Stock Exchange (BSE), up 5.2%. Over the past three months, the stock has gained 14%, but it’s down 7% for the year so far. The company’s market value is now Rs 2,49,268 crore, making it a major player in the market.
What’s Next for Eternal?
Morgan Stanley expects Eternal’s quick commerce business to keep growing, with order values increasing by 9–11% through 2028. However, competition is tough, so profit margins may improve more slowly than hoped. Losses in adjusted EBITDA are expected to peak by the end of 2025, but the long-term outlook for 2031 remains strong.
Why Investors Are Excited
Eternal’s leadership in food delivery and quick commerce, combined with strong financial management and growth potential, makes it an attractive investment. Morgan Stanley’s positive outlook and the booming quick commerce market are key reasons why the stock is soaring.
