Eternal Shares Surge 7%: Buy, Sell or Hold?
Eternal’s share price has witnessed a significant jump of over 7% following the announcement of its Q3 results, which showcased a remarkable net profit increase of 73% year-on-year. This surge highlights the company’s robust performance, particularly in its food delivery and quick commerce segments. Operating under the umbrella of Zomato and Blinkit, Eternal has reported substantial growth, with revenues soaring by 201% to ₹16,315 crore.
A key driver behind this impressive growth is the quick commerce segment, where Blinkit has shown a staggering net order value (NOV) growth of 121% year-on-year. This marks a turning point for the company, indicating its potential to capture a larger market share in an increasingly competitive landscape. The food delivery business also performed well, with adjusted revenues rising 26% year-on-year, signaling strong consumer demand.
Despite the positive financial results, the resignation of CEO Deepinder Goyal raises questions about the company's future direction. Goyal's transition to Vice Chairman and Director is seen as a strategic move to avoid conflicts as he diversifies his investments outside the company. Analysts are closely monitoring how this change in leadership will affect Eternal's growth trajectory.
Brokerages have responded positively to the Q3 results, with Nuvama maintaining a 'Buy' rating and raising the target price for Eternal shares to ₹430 apiece. Meanwhile, Motilal Oswal Financial Services, while optimistic about the food delivery sector, has reduced its future earnings estimates slightly due to anticipated competitive pressures.
Investors are keenly assessing whether to buy, sell, or hold onto Eternal shares. While the stock has shown resilience with a 32% increase over the past year, it has also faced challenges, including a 16% decline over the last three months. The company's performance amidst these market fluctuations will be crucial for investors looking to capitalize on its growth potential.
As of the latest trading session, Eternal shares were up by 2.45% at ₹290.35 apiece on the BSE. With such dynamic shifts in the market, it's essential for investors to stay informed and consult with financial experts before making any decisions regarding their investments in Eternal.
