Eternal Ltd
Eternal Ltd
Consumer Discretionary F&OIncorporated in 2010, Zomato Limited is one of the leading online Food Service platforms in terms of the value of food sold. Its offerings include food delivery, dining-out services, Loyalty programs, and others. As of December 31, 2020, Zomato has established a strong footprint across 23 countries with 131,233 active food delivery restaurants, 161,637 active delivery partners, and an average monthly food order of 10.7 million customers.[1]
Eternal Ltd commands strong analyst consensus (90.6% buy ratings) and has delivered exceptional 97% compounded sales CAGR over 3 years, but a PE of 680x with ROE of just 1.35% and zero dividends makes the valuation extremely stretched. The risk-reward at current levels favors waiting for either a meaningful earnings inflection or a price correction.
Key Fundamentals
LargecapEcommerceRetailTechnical Indicators
Key Insights
Strengths
2- Company is expected to give good quarter
- Company has delivered good profit growth of 21.6% CAGR over last 5 years
Weaknesses
4- Stock is trading at 7.99 times its book value
- Though the company is reporting repeated profits, it is not paying out dividend
- Company has a low return on equity of 1.35% over last 3 years.
- Earnings include an other income of Rs.1,396 Cr.
Growth Rate
AI Analysis — Bull vs Bear
anthropic claude-opus-4.6 3d agoEternal Ltd commands strong analyst consensus (90.6% buy ratings) and has delivered exceptional 97% compounded sales CAGR over 3 years, but a PE of 680x with ROE of just 1.35% and zero dividends makes the valuation extremely stretched. The risk-reward at current levels favors waiting for either a meaningful earnings inflection or a price correction.
- Overwhelming analyst consensus with 90.63% buy ratings (29 out of 32 analysts recommend buy)
- Exceptional revenue growth with TTM compounded sales growth of 169% indicating strong business momentum
- 3-year compounded sales CAGR of 97% demonstrates sustained hypergrowth trajectory
- 5-year compounded profit CAGR of 22% shows the company is scaling toward profitability
- Company is expected to deliver a good upcoming quarter per consensus estimates
- 5-year compounded sales CAGR of 94% confirms long-duration structural growth story
- Market cap of Rs.2,47,242 Cr reflects institutional confidence in the platform's long-term TAM
- Stock CAGR of 53% over 3 years shows strong investor returns despite volatile profitability
- PE ratio of 680x is extremely elevated, leaving no margin of safety for execution misses
- 3-year average ROE of only 1.35% indicates very poor capital efficiency for shareholders
- Zero dividend yield with no payout despite reporting profits signals weak free cash flow conversion
- Trading at 8.04x price-to-book value is expensive for a company generating sub-2% ROE
- TTM compounded profit growth is negative at -16%, showing earnings are declining even as revenue surges
- Other income of Rs.1,396 Cr inflates reported profits, masking weaker operating performance
- 5-year ROE averages -2%, meaning the company has destroyed shareholder value on a cumulative basis
- 3-year profit CAGR of 33% significantly lags 3-year sales CAGR of 97%, indicating margin compression at scale
This is AI-generated analysis, not financial advice. Do your own due diligence.
AI News Digest
anthropic claude-opus-4.6 14h ago- ₹9.63 crore GST demand order Jun 10
Received GST demand of ₹6.49 crore plus ₹2.50 crore interest and ₹64.87 lakh penalty from Andhra Pradesh authorities for Apr 2023-Mar 2024. Shares fell 2.36% to ₹239.85 on the news.
- Earnings downgrade risks persist Jun 12
Morgan Stanley warns earnings downgrade risks remain due to heightened competition in quick commerce and instant services, with PE/VC funding down 23% YoY.
- Sector competition pressure on margins Jun 12
Intensifying competition in quick commerce and instant services likely to keep pressure on margins and profitability, with Blinkit growth expected to normalise near 70% in FY27 amid elevated competition.
- Morgan Stanley top internet pick Jun 12
Morgan Stanley maintains Overweight rating citing strong execution, healthy balance sheet, and long-term growth exposure. Eternal outperformed Swiggy by 11 percentage points over the past month.
- Strong Q4FY26 earnings beat Jun 10
Revenue rose 6% QoQ to ₹17,292 crore beating estimates; EBITDA surged 32% QoQ to ₹486 crore vs ₹400 crore poll; net profit jumped 70.6% YoY to ₹174 crore.
- Motilal Oswal top internet bet May 26
Motilal Oswal picks Eternal as top internet stock with Q4FY26 net revenue of ₹172 billion (up 196% YoY), Blinkit NOV up 96% YoY, and management targeting $1 billion adjusted EBITDA by FY29.
- Bajaj Broking buy with ₹290 target Jun 3
Technical buy recommendation at ₹245-252 range with target of ₹290 (50% retracement level) and stop loss at ₹223, citing falling trendline breakout and MACD buy signal.
- Blinkit 60%+ NOV CAGR guided May 26
Management confident of sustaining 60%+ Blinkit NOV CAGR over three years with plans to expand to 3,000+ stores, targeting significant retail disruption.
- Trading window closed for Q1FY26 Jun 19
Eternal shut its trading window from June 20, 2026 until 48 hours post Q1FY26 results, with PAN freezing for designated persons starting July 1, 2026.
- Top gainer with high volume May 26
Eternal led market gainers with 1.83% rise to ₹252.21, recording highest trading volume at 61.79 lakh shares in a largely flat market session.
TL;DR: Eternal is executing well on food delivery and Blinkit growth (96% YoY NOV), earning top-pick status from Morgan Stanley and Motilal Oswal. Key risks are intensifying quick-commerce competition pressuring margins and a minor ₹9.63 crore GST demand. The earnings trajectory is improving with EBITDA margins expanding to 2.8% and a clear path toward $1 billion adjusted EBITDA by FY29, though near-term stock performance depends on competitive intensity normalizing.
Quarterly Results
| Mar 2023 | Jun 2023 | Sep 2023 | Dec 2023 | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 2,056 | 2,416 | 2,848 | 3,288 | 3,562 | 4,206 | 4,799 | 5,405 | 5,833 | 7,167 | 13,590 | 16,315 | 17,292 |
| Expenses | 2,282 | 2,464 | 2,895 | 3,237 | 3,476 | 4,029 | 4,573 | 5,243 | 5,761 | 7,052 | 13,351 | 15,947 | 16,806 |
| Operating Profit | -226 | -48 | -47 | 51 | 86 | 177 | 226 | 162 | 72 | 115 | 239 | 368 | 486 |
| OPM % | -11% | -2% | -2% | 2% | 2% | 4% | 5% | 3% | 1% | 2% | 2% | 2% | 3% |
| Other Income | 171 | 181 | 212 | 219 | 235 | 236 | 221 | 252 | 368 | 354 | 352 | 348 | 342 |
| Interest | 15 | 18 | 16 | 18 | 20 | 25 | 30 | 43 | 56 | 67 | 86 | 107 | 132 |
| Depreciation | 134 | 130 | 128 | 128 | 140 | 149 | 180 | 247 | 287 | 314 | 376 | 439 | 468 |
| PBT | -204 | -15 | 21 | 124 | 161 | 239 | 237 | 124 | 97 | 88 | 129 | 170 | 228 |
| Tax % | -8% | -113% | -71% | -11% | -9% | -6% | 26% | 52% | 60% | 72% | 50% | 40% | 24% |
| Net Profit | -188 | 2 | 36 | 138 | 175 | 253 | 176 | 59 | 39 | 25 | 65 | 102 | 174 |
| EPS in Rs | -0.22 | 0 | 0.04 | 0.16 | 0.2 | 0.29 | 0.2 | 0.06 | 0.04 | 0.03 | 0.07 | 0.11 | 0.18 |
Profit & Loss
| Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Sales | 466 | 1,313 | 2,605 | 1,994 | 4,192 | 7,079 | 12,114 | 20,243 | 54,364 |
| Expenses | 558 | 3,556 | 4,909 | 2,461 | 6,043 | 8,290 | 12,071 | 19,595 | 53,156 |
| Operating Profit | -92 | -2,243 | -2,305 | -467 | -1,851 | -1,211 | 43 | 648 | 1,208 |
| OPM % | -20% | -171% | -88% | -23% | -44% | -17% | 0% | 3% | 2% |
| Other Income | 21 | 1,285 | 16 | -200 | 793 | 682 | 846 | 1,066 | 1,396 |
| Interest | 6 | 9 | 13 | 10 | 12 | 49 | 72 | 154 | 392 |
| Depreciation | 29 | 43 | 84 | 138 | 150 | 437 | 526 | 863 | 1,597 |
| PBT | -107 | -1,010 | -2,386 | -815 | -1,220 | -1,015 | 291 | 697 | 615 |
| Tax % | 0% | 0% | 0% | 0% | 0% | -4% | -21% | 24% | 40% |
| Net Profit | -107 | -1,010 | -2,386 | -816 | -1,222 | -971 | 351 | 527 | 366 |
| EPS in Rs | -3,070 | -28,574 | -70,097 | -23,124 | -1.54 | -1.14 | 0.4 | 0.55 | 0.38 |
| Div. Payout % | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
Balance Sheet
| Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Equity Capital | 0.03 | 0.03 | 0.03 | 0 | 764 | 836 | 868 | 907 | 919 |
| Reserves | 1,036 | 2,356 | 457 | 7,644 | 15,741 | 18,624 | 19,545 | 29,410 | 30,061 |
| Borrowings | 186 | 348 | 326 | 527 | 70 | 507 | 749 | 2,045 | 4,592 |
| Other Liabilities | 152 | 709 | 2,117 | 532 | 751 | 1,632 | 2,194 | 3,261 | 5,164 |
| Total Liabilities | 1,374 | 3,413 | 2,900 | 8,704 | 17,327 | 21,599 | 23,356 | 35,623 | 40,736 |
| Fixed Assets | 190 | 389 | 1,591 | 1,539 | 1,404 | 6,344 | 6,448 | 9,532 | 12,675 |
| CWIP | 1 | 1 | 1 | 0 | 1 | 7 | 18 | 51 | 136 |
| Investments | 829 | 2,145 | 324 | 2,205 | 4,718 | 6,765 | 11,645 | 13,192 | 14,833 |
| Other Assets | 354 | 879 | 985 | 4,959 | 11,204 | 8,483 | 5,245 | 12,848 | 13,092 |
| Total Assets | 1,374 | 3,413 | 2,900 | 8,704 | 17,327 | 21,599 | 23,356 | 35,623 | 40,736 |
Cash Flow
| Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Operating | — | — | -2,144 | -1,018 | -693 | -844 | 646 | 308 | 632 |
| Investing | — | — | 1,740 | -5,245 | -7,971 | 797 | -348 | -7,993 | 536 |
| Financing | — | — | 359 | 6,402 | 8,750 | -127 | -207 | 8,042 | -842 |
| Net Cash Flow | — | — | -45 | 139 | 86 | -174 | 91 | 357 | 326 |
| Free Cash Flow | — | — | -2,165 | -1,028 | -750 | -945 | 444 | -623 | -1,114 |
| CFO/OP | — | — | 92 | 222 | 36 | 67 | 1,747 | 66 | 52 |
Ratios
| Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | Mar 2024 | Mar 2025 | Mar 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Debtor Days | 20 | 20 | 17 | 24 | 14 | 24 | 24 | 35 | 12 |
| Inventory Days | — | — | — | 28 | 28 | 22 | 11 | 12 | 26 |
| Days Payable | — | — | — | 565 | 298 | 178 | 112 | 101 | 36 |
| Cash Conversion Cycle | 20 | 20 | 17 | -513 | -257 | -132 | -77 | -54 | 2 |
| Working Capital Days | -43 | -31 | -20 | 96 | 316 | 200 | 41 | 45 | 57 |
| ROCE % | — | -115% | -135% | -12% | -13% | -6% | 1% | 3% | 3% |
Documents
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Company Information
Incorporated in 2010, Zomato Limited is one of the leading online Food Service platforms in terms of the value of food sold. Its offerings include food delivery, dining-out services, Loyalty programs, and others. As of December 31, 2020, Zomato has established a strong footprint across 23 countries with 131,233 active food delivery restaurants, 161,637 active delivery partners, and an average monthly food order of 10.7 million customers.[1]