Eternal (formerly Zomato) took the Dalal Street off guard while its course of action continued to climb despite a 90% drop in net profit in the first quarter.
At the time of publication, the course of Eternal’s action was negotiated at Rs 299.75, 10.32% compared to its previous closure and very close to its highest 52 weeks of Rs 311.25.
The company posted a sharp 90% drop in net profit for the first quarter of 26 to Rs 25 crosses against Rs 253 crosses a year ago, but the stock did not start.
Instead, he propelled to record heights, while investors looked beyond the net profit and doubled the wider growth story.
Why climb the course of Eternal’s action?
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What really stole the spotlight was the income.
The company’s head line jumped 70% in annual sliding to 7,167 belts, thanks in large part to Blinkit.
The fast trade arm has more than tripled its revenues at Rs 2,400 crosses this quarter, officially exceeding the traditional food delivery company for the first time.
Blinkit’s rise begins to reshape Eternal’s identity. Once known mainly for food delivery, the company is now strongly leaning in fast trade and investors are careful.
The rapid growth of Blinkit, with its annual value of the value of the order to $ 10 billion, transformed it into the main engine of the expansion of Eternal.
This momentum seems to prevail over concerns about the drop in profits, because market changes are concentrated in short -term income in the longer -term game of the company in the evolving digital consumer landscape of India.
What about a drop in net profit?
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The sharp drop in Eternal profits is largely the result of its continuous thrust to extend the flashes and move to new areas such as ticketing and events.
These bets are expensive, with initial spending in logistics, technology and marketing which continue to lower net margins.
Even so, there are early signs that business investments are starting to bear fruit.
The margins in the area of basic food delivery improved at 5.0% against 3.9% a year ago, and Blinkit also managed to reduce its losses while increasing efficiency, a promising trend as it increases.
What do analysts say?
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Jefferies and Bernstein have become more optimistic on Eternal, increasing their notes and their price objectives after the latest Blinkit figures have exploded past expectations.
The rate of growth of fast trade in fast trade has drawn the attention of the street, the analysts calling it the clear engine of the company’s momentum.
But the verdict is not unanimous. Some brokerage houses have reported continuous pressure on the margins and wondered if the current assessment leaves enough space for the increase.
However, most remain constructive. Tuesday, 28 of the 32 analysts who follow the action maintained a note “Buy”, indicating that, for the moment, the market is willing to support the history of the Blinkit scale, even if the profitability takes a rear seat.
The CEO of Eternal, Deepinder Goyal, brought an assured tone after the release of profits, which clearly indicates that the company did not continue the short -term profits to the detriment of long -term growth.
He supervised Blinkit’s rapid expansion and his transition to a model led by stocks not as a cost burden, but as a strategic passage to cement leadership in a space that always takes shape.
