Eternal Shares Surge 4% on MSCI Weightage Hopes, $390M Inflows Expected

TECH

Overview

Eternal Ltd. shares climbed 4% Tuesday, extending a five-session rally. Increased foreign headroom after a shareholding update makes the stock eligible for full MSCI weightage, potentially attracting $390 million in passive inflows. This news bolsters analyst confidence, with most maintaining 'buy' ratings despite recent corrections.

MSCI Weightage Boost

Shares of Eternal Ltd., the parent company of food delivery giant Zomato and quick commerce firm Blinkit, advanced as much as 4% on Tuesday, January 13. This marks the fifth consecutive session of gains for the stock.
The recent surge is fueled by an increase in foreign headroom, revealed in the company's latest shareholding pattern released Monday evening.

Analyst Sentiment Remains Positive

An analyst sales note highlighted that the stock previously held only half weight in the MSCI index due to limited foreign headroom. With foreign headroom now exceeding the 25% threshold, the stock is expected to qualify for full MSCI weightage. Such a change, potentially reflected in the February MSCI review, could trigger passive inflows of approximately $390 million.

Despite concerns over profitability in its quick commerce segment and rising competition, analysts maintain a bullish outlook. HSBC projects a ₹350 price target, while JM Financial sets a ₹400 target. Currently, 29 out of 33 analysts covering Eternal Ltd. recommend a 'buy' rating, with only four suggesting 'sell'.

Eternal Ltd. shares, trading 2.5% higher at ₹292.45, remain down approximately 30% from their record high of ₹368.45.

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