Eternal Shares Surge 6% to Three-Month High After Q3 Beat

Introduction to the Market Rebound

Shares of Eternal Ltd., the parent company of Zomato and Blinkit, experienced a significant rally on Tuesday, February 10, climbing over 6% to reach a near three-month high. The stock touched an intraday peak of ₹307.45, its highest point since November 27, 2025. This upward movement marks a notable rebound for the company, which had faced a sharp correction following its third-quarter earnings announcement. The initial negative market reaction was largely attributed to a surprise leadership transition, which temporarily overshadowed a robust financial performance.

Strong Q3 Financial Performance

For the quarter ending December 2025, Eternal Ltd. reported strong financial results that surpassed analyst expectations. The company posted a consolidated net profit of ₹102 crore, a substantial 57% increase year-on-year. This figure was in line with consensus estimates. Revenue from operations saw a massive surge, rising 201% year-on-year to ₹16,315 crore, beating the projected ₹15,500 crore. This exceptional topline growth was primarily driven by the quick commerce segment and an accounting shift to include the full value of goods sold, rather than just commissions. On a like-for-like basis, adjusted revenue growth was a healthy 64% year-on-year.

Profitability and Margin Expansion

The company's operational efficiency also showed marked improvement. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at ₹368 crore for the quarter, a 54% increase from the previous year and slightly ahead of the ₹300 crore estimate. EBITDA margins expanded by 50 basis points to 2.3%, up from 1.8% in the same quarter last year. This performance indicates strengthening profitability even as the company continues to invest in growth.

Segment Highlights: Quick Commerce Shines

A key highlight of the quarter was the performance of Eternal's newer ventures. Both the quick commerce business, Blinkit, and the B2B restaurant supply unit, Hyperpure, achieved Adjusted EBITDA profitability for the first time. The quick commerce segment was the primary growth engine, with its adjusted revenue surging an impressive 776.1% year-on-year to ₹12,256 crore. The food delivery business also maintained steady growth, with its adjusted revenue increasing by 26.5% year-on-year to ₹3,053 crore, supported by improved demand and higher order volumes.

Leadership Transition and Initial Market Jitters

The strong financial report was accompanied by a significant change in leadership. Founder Deepinder Goyal announced he would step aside from his role as Managing Director and Chief Executive Officer to become Vice Chairman. Albinder Dhindsa, the CEO of Blinkit, was appointed as the new MD and CEO of Eternal Ltd. This unexpected announcement initially unsettled investors, leading to a sharp drop in the stock price and erasing over $1 billion in market value despite the positive earnings. The market's concern appeared to stem from the uncertainty associated with a founder transitioning from an executive role.

Analyst Confidence and Stock Outlook

Despite the initial volatility, the analyst community remains largely bullish on Eternal's prospects. Of the 33 analysts covering the stock, 30 maintain a 'Buy' rating, with only three recommending a 'Sell'. Several brokerages raised their target prices for the stock following the results, with some setting targets as high as ₹480. This underlying confidence from market experts, focused on the company's strong execution and growth trajectory, helped fuel the subsequent rebound. The recent surge suggests that investors are now looking past the management shuffle and focusing on the strong operational performance and future growth potential, particularly in the high-growth quick commerce sector.

Conclusion: A Positive Turnaround

Eternal's 6% stock surge reflects a decisive turnaround in investor sentiment. After an initial shock from the leadership change, the market has now digested the news and is rewarding the company for its robust Q3 performance, especially the milestone of profitability in its Blinkit and Hyperpure businesses. While the stock remains off its recent peak of ₹364, the strong rebound and overwhelming analyst support suggest a positive outlook. Investors will now be watching to see if the new leadership can sustain this growth momentum and continue to expand margins across its business segments.