Why Eternal Share Price is Falling

Indian stock markets are showing positive momentum in early trade today, 21 May. At the time of writing, the BSE Sensex is trading around 81,724, up about 538 points (0.64%), while the NSE Nifty is near 24,838, up roughly 154 points (0.62%).

Key gainers on the Sensex include Sun Pharma, Nestle India, Ultratech Cement and HUL. On the downside, stocks like IndusInd Bank, Adani Ports and Kotak Bank are falling.

The broader markets are mixed, with Nifty MidCap and SmallCap indices slightly down by about 0.1% each. Sector-wise, the Nifty Pharma index is up 1.4%, while the Nifty IT index has declined by 0.4%.

One stock that is falling is Eternal, formerly known as Zomato.

Let's tell you some of the top reasons for the same.

#1 Capping of Limit on Foreign Ownership

The board of Eternal had earlier in April 2025 sought shareholder approval to consider a cap of up to 49.5% on the aggregate foreign ownership.

The shareholders have now approved of the same. Some estimates suggest that this could to lead to around US$ 1.3 billion (bn) outflow by foreign investors as they divest shares to comply with the new limits.

This move saw some selling pressure on the stock.

Foreign investment in the company was around 44.3% at the end of March 2025 and may have risen beyond this limit. On account of the limits set, there might be limited interest from foreign investors in the stock in the short term.

Media reports have suggested the move could also see an exclusion of the company from the MSCI index or a reduction in weightage. All of these factors led to some selling in the stock of Eternal.

#2 Increased Expenses at Blinkit Dragging Profitability

The recent fall in the share price of Eternal can also be attributed to declining profits. For the quarter ended Q4 FY25, Eternal reported a net profit of Rs 390 million (m), which represents a sharp decline of 78% compared to Rs 1,750 m in the same quarter a year ago.

The losses stem from Blinkit's aggressive expansion strategy, including adding 294 new stores in the quarter-the highest ever in a single quarter-bringing the total to 1,301 stores.

What Next?

The company has faced profit declines due to investments in Blinkit's rapid expansion and infrastructure. Management is focused on optimising costs, scaling dark stores, and improving margins, while continuing to invest aggressively in growth.

Internal leadership reshuffling has also taken place, with founder Deepinder Goyal temporarily leading the food delivery division to ensure focus and stability.

Blinkit expects losses to continue in the short term due to heavy investments in store expansion, warehousing, and marketing.

While the quick commerce market is expanding rapidly, there is intense competition. The Indian quick commerce market is projected to reach US$ 5.5 bn in 2025, with fierce competition fuelled by rapid dark store expansion, advanced logistics, AI-driven route optimisation, and partnerships with local retailers.

Blinkit faces competition from BigBasket, Zepto, and Swiggy Instamart. The aggressive expansion of Reliance Retail in quick commerce will further intensify competition.

In short, while the food delivery business is expected to do well, performance of Eternal would depend on operational efficiencies and how it navigates competition in the quick commerce space.

How Shares of Eternal have Performed Recently

Over the last one month, the share price of Eternal has fallen 2% from levels of Rs 232.5 to the current levels of Rs 228. In the past one year, the share price of the company has gained 21%.

The stock hit a 52-week high of Rs 304.5 on 5 December 2024. The stock also hit a 52-week low of Rs 146.85 on 4 June 2024.

About Eternal

Eternal Ltd (formerly Zomato Ltd) is a diversified Indian digital consumer company.

The company has a strong presence in the food ordering and delivery business, operating under the well-known Zomato brand.

In the quick commerce space, it has presence through Blinkit. This division offers rapid grocery and essentials delivery, focusing on ultra-fast delivery from a network of dark stores.

The company's B2B supplies via Hyperpure, supplies fresh, quality ingredients and other products to restaurants and food businesses.

The company recently changed its name from Zomato to Eternal.

Eternal was included in the NSE Nifty 50 index in March 2025. This inclusion reflects the company's significant growth in the quick commerce and food delivery space.

To know more, check out Eternal's latest fact sheet and quarterly results . You can also compare Eternal with its peers on our website.

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To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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