Eternal shares rebound over 70% from March lows, emerge as top Nifty 50 recovery stock; what drove the rally?

Eternal, the parent company of Zomato and Blinkit, has been on a strong recovery run on Dalal Street as investor sentiment towards the stock improves. Investors appear to be appreciating the company's improving execution in its quick commerce business, with the progress also reflected in its September quarter earnings.

The shares began the year on a tepid note, closing the first three months in the red, with the sell-off dragging the stock to nearly a one-year low. However, the stock's fortunes turned in April, and the rally has only strengthened since then, with the shares ending each subsequent month higher and scaling new records along the way.

From its March low of ₹212.60 apiece, the stock has recovered 71% to close at ₹363 on Monday. The sharp turnaround has made it the biggest recovery story among Nifty constituents in 2026.

While Eternal has been winning back investors' confidence, its close peer Swiggy is facing deep trouble. Swiggy's shares have crashed 51% in less than 11 months, adding to the 29% decline recorded in 2025. This highlights the contrasting fortunes of two companies operating in the same business, with Eternal staging a strong recovery while Swiggy continues to struggle.

India's Eternal expects growth in Blinkit, its quick-commerce business, to accelerate from the December quarter, as the company bets on a more stable competitive environment to expand its network faster without compromising margins.

"We don't expect there to be a short-term margin reduction on account of accelerated store addition," Chief Financial Officer Akshant Goyal said during a post-earnings call on Wednesday.

Eternal and rival Swiggy have been rapidly expanding their networks of small warehouses, known as dark stores, as quick commerce has emerged as a key growth driver for both companies.

Eternal plans to expand Blinkit's network to more than 3,500 stores by March 2027 and around 5,000 by March 2028, from 2,751 stores at the end of September, with a significant portion of the new additions expected to come from smaller cities.

Blinkit added 308 net new stores during the September quarter, taking its network to 2,751. The company reiterated its target of crossing 3,500 stores by March 2027.

Blinkit's net order value (NOV) surged 79.3% year-on-year to ₹20,940 crore in Q2 FY27. The business also reported an adjusted EBITDA profit of ₹184 crore, marking its sixth consecutive quarter of margin improvement.

Supported by the rapid scaling of its quick-commerce business, Eternal reported a consolidated net profit of ₹125 crore in the September quarter, nearly doubling from ₹65 crore in the year-ago period.

Domestic brokerage firms remain optimistic about Eternal's growth prospects, backed by its leading food delivery platform, Blinkit's expanding quick-commerce network and improving profitability across business segments.

Motilal Oswal believes Eternal is well positioned to benefit from its strong food delivery platform and Blinkit's quick-commerce network. The brokerage highlighted the food delivery business's long-term order value growth target of over 20%, reflecting sustained growth opportunities in the segment.

Kotak Neo has a Buy rating on Eternal with a target price of ₹435, implying an upside of 26.5% from the reference price of ₹344. The brokerage highlighted year-on-year net order value growth of 21% at Zomato and 79% at Blinkit in Q2 FY27, alongside sequential improvement in adjusted EBITDA margins.

It expects Eternal to deliver a 63% revenue CAGR over FY26–FY29, with EBITDA margins expanding from 2.2% in FY26 to 4.6% by FY29, driven by growth in quick commerce and food delivery.

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Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.

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