Eternal shares jump 15%; Zomato parent top performer on Nifty 50 - here's why the stock is rallying

Shares of Eternal, the parent company of Zomato and Blinkit, soared nearly 15% on Tuesday after it reported strong quarterly revenue, reinforcing investor confidence in its fast-growing quick-commerce arm. The company's shares jumped 14.6% to Rs 311.25, making it the top performer on the Nifty 50 index, which remained mostly flat.Rival Swiggy’s shares also rose 5.3% during the session.Blinkit, known for its 10-minute deliveries, from daily essentials to high-end gadgets, stood out this quarter, overtaking Zomato in growth for the first time. Blinkit reported a 127% year-on-year rise in net order value to Rs 9,203 crore, beating growth in the core food delivery segment."We overestimated the competitive threat," analysts at Jefferies told Reuters, citing the unit's growth, improved margins and expectations of higher growth in the future.Nuvama echoed that sentiment, calling Blinkit the standout performer this quarter.Following the results, at least ten brokerages raised their price targets on the stock, while four upgraded their ratings. The median price target now stands at Rs 311, up from Rs 287.5 a month ago, according to LSEG data.

Despite rising costs, Eternal’s performance, especially Blinkit’s momentum, has boosted confidence among investors and analysts, signaling a promising growth trajectory in the quick commerce space.The sharp rally came after Eternal posted a consolidated net profit of Rs 25 crore in the June quarter. While this is lower than the Rs 253 crore profit reported a year ago, the company’s revenue from operations surged to Rs 7,167 crore from Rs 4,206 crore. Expenses also rose to Rs 7,433 crore from Rs 4,203 crore.