Shares of Eternal, the parent company of Zomato and Blinkit, have climbed 8% over two days following strong second-quarter financial results. The rally is driven by robust growth in the quick commerce segment, where order values surged 79.3%. Investors are tracking the company's aggressive store expansion plans and ongoing investment in technology despite pressure on profit margins.
Eternal shares saw a steady climb of 8% over two days, trading at ₹327.80 on the BSE on Monday. This positive market response followed the company's financial results for the quarter ending September 2026, where the quick commerce segment emerged as the primary driver of growth.
The quick commerce platform, Blinkit, reported a 79.3% increase in gross order value, reaching ₹20,940 crore compared to the previous year. This rapid expansion has led management to set a target of 3,500 store locations by March 2027, with a further goal to reach 5,000 stores in the following year. While metro cities have been the foundation of the business, the company is now expanding its model into smaller cities, testing whether the operational efficiency seen in urban areas can be replicated at a larger scale.
Brokerage firm Axis Securities highlighted the company's strategic shift toward long-term earnings, maintaining a target price of ₹365 per share. Analysts at the firm expect that the company’s decision to prioritize market share over immediate profit margin gains will influence EBITDA performance over the next two years. The company has publicly stated a goal of achieving $1 billion in EBITDA by the 2029 fiscal year, an ambitious target that requires consistent execution in an increasingly competitive market.
The quick commerce sector currently faces intense competition from established players such as Swiggy’s Instamart and Zepto. In this environment, the company's ability to manage costs while rapidly expanding its store network is a critical factor for investors to monitor. Aggressive expansion involves significant capital spending, which can place pressure on cash flow and profit margins if demand growth slows or if operational costs in new locations exceed initial revenue expectations.
On the technology front, the firm is testing an internal AI tool named Dark.ai to improve productivity and automate workflows. While this could potentially lower long-term operational costs, management has clarified that they will discontinue the project if it fails to deliver tangible results. Additionally, while the Zomato app is integrating generative AI, current data suggests that consumer preference remains focused on traditional visual navigation rather than conversational ordering interfaces.
For investors, the key area to watch in coming quarters will be the execution of the aggressive store rollout plan and whether the company can maintain its growth rate in smaller, non-metro markets. Furthermore, how the company balances its high spending on expansion with the need to move toward its long-term profitability targets will remain central to the business story.