Eternal (Zomato) shares are expected to remain in focus and may extend their rally in today’s trade, as investor sentiment improves following a strong set of Q1FY26 earnings and a spate of positive brokerage upgrades. The company, now renamed Eternal Limited, posted better-than-expected numbers for the quarter ended June 2025, with a significant turnaround narrative building around its quick commerce arm, Blinkit.
Eternal (Zomato) Q1FY26: Better-than-expected top-line, stable margins
Zomato’s consolidated revenue jumped 70.4% year-on-year to ₹7,167 crore, beating Street estimates. While EBITDA fell 35% YoY to ₹115 crore due to operating investments, the company still managed to report a positive EBITDA margin of 1.6%. Profit after tax dropped sharply to ₹25 crore, down from ₹253 crore YoY, but this was largely anticipated due to elevated investment in scale and expansion.
Other income was a bright spot, rising 50% YoY to ₹354 crore, helping cushion the decline in profitability. The management acknowledged the softness in food delivery over the past few quarters but noted that the growth slowdown has now bottomed out.
On quick commerce, CEO Deepinder Goyal said, “Margins in quick commerce have also bottomed out, and we see a path to scale our new venture District to $3 billion in topline and $150 million in adjusted EBITDA over the next five years.”
Blinkit surpasses food delivery, says CLSA
In a major development, CLSA noted that Blinkit is now bigger than food delivery, both in gross order value and contribution, highlighting the momentum in Zomato’s high-growth quick commerce segment. The brokerage maintained its High Conviction Outperform call and a target price of ₹385.
Brokerages across the board have upgraded or reiterated positive ratings on Zomato:
- Jefferies upgraded the stock to Buy, raising the target price to ₹400, citing that the worst of competitive pressure is behind.
- Goldman Sachs maintained a Buy rating and raised the target to ₹340, adding that the market is underestimating Blinkit’s market share gains over the next 2–3 quarters.
- Bernstein reiterated Outperform, with a raised target of ₹320, calling Zomato their top pick in the new economy space and a clear beneficiary of the structural shift to quick commerce.
- Nuvama while retaining its Buy call on the stock has raised its target price to Rs 320 and also revised its earnings estimates for FY26 and FY27 by 1.4% and 8.4% respectively.
The combination of robust revenue growth, improving profitability in quick commerce, and strong guidance from management has led analysts to believe that Zomato shares may remain in an uptrend in the near term. The company’s strategic clarity around Blinkit and District, and the bottoming out of food delivery volumes, have been taken positively by the Street.
With Q1 results exceeding expectations, and multiple brokerages raising targets, Zomato could see continued buying interest in Tuesday’s trade. The stock has already rallied in the run-up to the results, but given the structural story and momentum in Blinkit, further upside may still be on the table.
