Eternal’s stellar rally, which saw its share price surge 520% in less than three years, hit a wall in October, with the stock now down 32% from its lifetime high of Rs 368.45. While the gains came at a frenetic pace, the correction was equally sharp as investors booked profits, wary that the stock had run ahead of its earnings.

Shares of the food delivery and quick commerce company are currently trading around Rs 279, with the stock taking 55 trading sessions to slide that far from its peak. After rising 38% between January and October, 2025 turned into a washout year for Eternal, as the stock ultimately ended flat on a year-on-year basis.

Kranthi Bathini, Director, Equity Strategy at WealthMills Securities, said the stock is fully priced in, attributing the ongoing correction to the sharp rally Eternal witnessed in 2023 and 2024 and through much of 2025, before the correction set in. He added that the company’s market capitalisation had at one point crossed Rs 3.5 lakh crore, which he termed a red flag.

Earnings were also impacted by a slowdown in Zomato’s food delivery business and Blinkit’s store expansion, prompting some investors to book profits, he said.

At the peak of Rs 368.45, Eternal’s market capitalisation shot to Rs 3.55 lakh crore and is now hovering around Rs 2.7 lakh crore. The stock was a multibagger in 2023 and 2024, with returns of 108% and 119%, respectively.

H1 FY26 earnings snapshot

The Deepinder Goyal-founded Eternal reported a 63% year-on-year decline in its consolidated net profit for the September quarter at Rs 65 crore, compared to Rs 176 crore in the same period last year. The profit after tax (PAT) attributable to the owners of the parent came in below Street estimates of Rs 108 crore.

However, the Zomato operator’s revenue from operations during the quarter stood at Rs 13,590 crore, up 183% from Rs 4,799 crore in the corresponding quarter of the previous financial year.In Q1 FY26, the company had reported a 90% YoY drop in consolidated profit after tax (PAT) at Rs 25 crore, compared to Rs 253 crore in the same quarter last year.

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Q3 expectations

Brokerage Nuvama Institutional Equities expects Eternal to be among the leaders in revenue growth in Q3, in its internet coverage universe. “We reckon our internet coverage shall deliver growth momentum in Q3 FY26E,” it said in a note.

It pegged a topline of Rs 15,492 crore in the October-December quarter, which could grow 187% YoY and 14% sequentially. Meanwhile, adjusted PAT is expected to go down 84% YoY to Rs 9.3 crore, while a sequential drop of 86% is seen.

“We anticipate food delivery NOV to grow 2.2% QoQ and 14.1% YoY, while adjusted EBITDA margin as a percentage of NOV is expected to be 5.4%. Blinkit NOV is seen growing 14.4% QoQ and 122% YoY, while absolute adjusted EBITDA loss is estimated at Rs 1.3 billion, or Rs 130 crore. Consolidated EBITDA margin shall contract 10 basis points QoQ,” the note said.

What should investors do?

Bathini recommends a buy on further dips for investors with a high risk appetite. In his view, the stock should be held for the medium to long term.

Technical analyst Nilesh Jain suggested an ‘Avoid’ in the short term, citing weak chart structure. The Equity Research Head and Vice President at Centrum Broking sees support at Rs 270, while resistance is placed at Rs 288.

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(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)