In a strong show of investor confidence, Eternal, the parent company of food delivery giant Zomato, saw its stock rise over 4.42% to ₹256.35 on the Bombay Stock Exchange (BSE) during early trading on Thursday. This marks a 12% surge over the last five trading sessions and a 6% gain over the past month.
Year-to-Date Performance Still Negative
Despite the recent momentum, Eternal’s year-to-date performance remains in the red, with the stock still down over 7% in 2025. This signals an opportunity for investors betting on a turnaround fueled by long-term fundamentals.
Morgan Stanley Backs Eternal as Top Sector Pick
Morgan Stanley, one of the world’s top brokerage firms, has reaffirmed Eternal as its top pick in the food tech and quick commerce sector. The firm highlights Eternal’s:
- Market leadership in both food delivery and quick commerce
- Strong cost efficiency
- Solid balance sheet
These factors, according to Morgan Stanley, reduce the likelihood of further equity dilution and position the company for sustained long-term growth.
📌 Target Price: ₹320 (33% upside from current levels)
📉 Price Floor: ₹200–220 (indicating favorable risk-reward)
Quick Commerce Growth Fuels Optimism
A major reason behind Eternal’s recent rally is the rapid growth of India’s quick commerce industry. Morgan Stanley has revised its growth estimate of the market:
- From $42 billion to $57 billion by 2030
- Eternal’s gross order value estimates for FY26–FY28 have been increased by 9–11%
Although competition remains fierce, Morgan Stanley believes losses in this segment will peak this quarter, with margin recovery expected from FY26 onwards.
Food Delivery Margins Set to Improve
Eternal’s food delivery arm, led by Zomato, is also projected to improve:
- Contribution margin to rise from 4.8% in FY26 to 6% by FY28
- Operational efficiency and unit economics are strengthening year-on-year
Financial Projections: Robust Growth Ahead
| Fiscal Year | Adjusted EBITDA (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|
| FY25 | ₹1,079 | < ₹500 (est.) |
| FY28 | ₹6,548 | ₹5,089 (Nearly 10x growth) |
These figures reflect strong core profitability, aided by better margins and additional revenue streams like Hyperpure.
3 Key Triggers for Stock Re-Rating
Morgan Stanley lists three catalysts that could drive further re-rating of Eternal’s stock:
- Consistent growth in quick commerce order volumes
- Improved food delivery margins
- Stable competition environment in coming quarters
Current Stock Status
At around 9:20 AM on Thursday, Eternal shares were trading at ₹243 on NSE, up 1% from the previous close. The stock has gained around 9% in the past week alone.