Eternal Ltd (Zomato) has received a flurry of brokerages’ updates following its Q1FY26 results, which showed robust revenue growth but a mixed margin performance. While quick commerce continued its explosive rise through Blinkit, food delivery saw stable trends. Multiple brokerages have maintained or upgraded their stance, with Jefferies upgrading to ‘Buy’ and raising the target price, while CLSA, Elara, Nuvama, and MOSL reiterated positive outlooks.
Jefferies upgraded the stock to Buy and raised its target price to ₹400, citing strong growth and a significantly positive management tone, particularly on the Quick Commerce (Q/C) segment. Jefferies believes the worst of competition is behind, with margin recovery and upside from 1P models driving the outlook.
CLSA, which has a High Conviction Outperform rating, noted that Blinkit has now overtaken food delivery in size, with NOV growing 127% YoY and contribution up 81%. Despite EBITDA losses being in line, the firm sees Blinkit’s contribution beating estimates and maintaining a solid operating rhythm.
Bernstein also maintained an Outperform rating, raising the target price to ₹320. It highlighted a strong beat in Q-Com and food delivery GOV growth at 16.2% YoY. The brokerage sees Zomato as a top pick in the space, supported by structural shifts toward Quick Commerce.
Macquarie, however, retained an Underperform rating with a much lower TP of ₹150. It acknowledged explosive growth in Q-Com but warned that the competitive landscape remains intense, which could prolong losses.
Elara Capital maintained a Buy rating, lifting the target price to ₹340. It observed strong Blinkit performance, improved store additions, and margin support from rising take rates. Despite cutting EPS estimates by 4–17% for FY25–28E due to other segmental losses, Elara raised valuation multiples on Q-Com due to improved visibility.
Motilal Oswal (MOSL) also maintained a Buy, raising TP to ₹330. It noted a 70% YoY surge in revenue, driven by Blinkit, though PAT fell sharply to ₹25 crore (vs. estimate of ₹270 crore). It expects stabilization in Q-Com losses and a sharp recovery in 2QFY26.
Nuvama kept its Buy rating intact and revised its TP to ₹320 from ₹290. It highlighted the strong Q1 revenue beat at ₹71.7 billion, but noted EBITDA margins fell short of estimates. Quick commerce NOV rose 127% YoY, and Nuvama expects margin improvements ahead due to inventory-led operations and dark store maturity.
Brokerage Summary Table on Eternal (Zomato)
| Brokerage | Rating | Target Price (₹) | Key Commentary |
|---|---|---|---|
| Jefferies | Buy (Upgraded) | 400 | Mixed Q1; mgmt commentary upbeat, margin outlook improved, Q/C upside seen |
| CLSA | High Conviction O-P | 385 | Blinkit NOV up 127% YoY, now bigger than food delivery; contribution beat estimates |
| Elara | Buy (Maintained) | 340 | Raised GOV/margin outlook for Blinkit, but EPS cut 4–17% due to losses in other segments |
| MOSL | Buy (Maintained) | 330 | Q-Com stabilizing; Revenue beat, PAT miss; expects strong 2QFY26 |
| Bernstein | Outperform (Maintained) | 320 | Strong GOV growth, EBITDA loss contained, top pick due to QC structural shift |
| Nuvama | Buy (Maintained) | 320 | Q1 beat on revenue; Blinkit NOV up 127% YoY; margin improvement expected from 1P model |
| Macquarie | Underperform (Maintained) | 150 | Cautious on competition in Q-Com; sees long period of losses, food delivery growth lagging |
Disclaimer: The views expressed are those of the respective brokerages and do not represent investment advice. Please consult your financial advisor before making any investment decisions.
