Eternal (Zomato) shares recover despite 78% decline in Q4 profit, should you buy?

Eternal shares erased early loss as it bagged buy recommendations from brokerages despite cautious tone on quick commerce slowdown following 78 per cent fall in Q4 net profit in March 2025 quarter.

The stock closed flat at ₹234.25 on the BSE, up 0.75 per cent, after hitting an intraday high of ₹239.50. The stock opened nearly 4.5 per cent lower at ₹221.90 from previous close.

Its rival-Swiggy closed 3.40 per cent lower on the BSE at ₹305.35, after hitting a 52-week low of ₹303.05.

Eternal, Zomato and Blinkit’s parent company, posted consolidated net profit of ₹39 crore in the said quarter as against ₹175 crore in the corresponding period of the previous fiscal. The consolidated revenue from operations was up 64 per cent to ₹5,833 crore.

Nuvama Institutional Equities stated that Blinkit reported lower-than-expected losses despite an accelerated pace of dark store additions in Q4. However, contribution margin improved, even with dilution from newly opened dark stores.

Adding that the EBIDTA losses would decline from next quarter, Nuvama maintained buy recommendation at a reduced target price from ₹300 to ₹290.

Elara Capital retained buy at the highest target price so far, ₹300, a 29 per cent upside potential from previous close.

Emkay Global analysts expect the stock remain range-bound in the near term due to heightened competitive intensity in quick commerce and planned investments in Going-out segment.

Nomura has maintained buy at a revised target price of ₹280 from ₹290. Jefferies has also trimmed the target price to ₹250, maintaining hold. Morgan Stanley maintained overweight at a target price of ₹290.

Motilal Oswal reiterated buy at a target price of ₹260, observing that Zomato expects competition to rise in both grocery and non-grocery quick commerce (QC), including pressure from next-day delivery players accelerating their speed, in contrast to street expectations.

Motilal has reduced estimates for FY26/27 by 52 per cent/27 per cent, due to uncertainty arising from intense competition and the accelerated expansion of the dark store network. “This expansion has led to reduced profitability due to increased investments,” it added.

However, HDFC Securities have maintained reduce rating at a target price of ₹220 emphasising that long-term growth hinges on scaling quick commerce profitability amid intense competition.