Eternal Shares, the stock of the technology company formerly known as Zomato, has experienced a 10% drop in the past month, stirring debate among investors about its current valuation and future potential. This decline comes despite a massive 183% surge in revenue, highlighting the complex dynamics influencing the stock's performance. As of November 19, 2025, the stock traded slightly higher at ₹308.20, with investors weighing mixed financial results.

Recent Performance and Key Metrics

Eternal's recent performance presents a mixed bag. While the stock is up 12% over the past year and 29% in the last six months, it has also slipped 4% in the last three months. The stock hit a 52-week high of ₹368.40 in October 2025 but had fallen to a 52-week low of ₹189.60 in April. This volatility reflects the uncertainty surrounding the company's evolving business structure.

The company's Q2 FY26 earnings revealed a sharp 63% year-on-year fall in profit, dropping to ₹65 crore, compared to ₹176 crore last year. However, revenue surged 183% to ₹13,590 crore, indicating strong business expansion. The company had posted a ₹25 crore profit in the previous quarter. Eternal's market capitalization stands at ₹2,93,903.61 crores, classifying it as a large-cap stock. However, its price-to-earnings (P/E) ratio is notably high at 1571.28, compared to the industry average of 27.25.

Analyst Opinions and Market Sentiment

Despite the recent dip, the consensus rating for Eternal is "Buy," based on the insights of 31 analysts. 26 analysts recommend buying the stock, while 4 suggest selling, and 1 recommends holding. The average 12-month price target for Eternal is ₹381.74, with a high estimate of ₹483 and a low estimate of ₹200. Morgan Stanley has also raised its target price for Eternal to ₹427, suggesting an upside potential of over 38% from current levels. They view the recent 14-15% correction as an attractive buying opportunity.

However, it's important to note that a 10-day moving crossover appeared recently, which has historically been followed by an average price decline of -3.56% within 7 days.

Factors to Consider

Several factors could be contributing to the stock's recent volatility. Eternal's Founder and CEO, Deepinder Goyal, noted that the recovery in growth has been slower than expected, citing headwinds such as soft discretionary consumption in India, the impact of quick commerce growth, and volatile weather conditions. Concerns over quick-commerce losses and stretched valuations have also contributed to the stock's weakness.

Eternal's inclusion in the Nifty 50 index is a noteworthy development that underscores its stature within the Indian equity market. This inclusion typically leads to increased visibility among institutional investors and index funds, which often adjust their portfolios to reflect the updated composition, potentially impacting the stock's liquidity and trading volumes.

The Verdict

Eternal's performance presents a complex picture. The company's strong revenue growth and expansion into quick commerce are positive signs. However, the decline in profits and high P/E ratio raise concerns about valuation.

Whether Eternal is worth buying depends on an investor's risk tolerance and investment horizon. Investors who believe in the company's long-term growth potential and are willing to weather short-term volatility may find the current price dip an attractive entry point. Conversely, those who are risk-averse or concerned about the company's profitability may want to remain cautious. It is important for investors to conduct thorough research and consider their own financial circumstances before making any investment decisions.