Bernstein Holds Firm on Eternal's ₹370 Price Target Amid Leadership Changes

Bernstein's maintaining its ₹370 target price for Eternal, the parent company of Zomato, despite a recent leadership shakeup. The brokerage believes its valuation method, focusing on operating earnings rather than sales metrics, is more fitting for the company's current growth phase.

Key Developments

• Bernstein's valuation approach applies a 35x multiple on Eternal's food delivery business and a 30x multiple for its quick commerce segment. This reflects a strategic shift in how the company is assessed as it evolves.
• Zomato's performance in Q3FY26 was impressive, with the stock nearing the ₹300 mark, showcasing strong operational results during a critical quarter.
• The leadership transition saw Deepinder Goyal stepping down as CEO to take on the role of Vice Chairman, while Albinder Dhindsa now manages daily operations. This change could influence the company's strategic direction moving forward.

Business Impact This consistent target price from Bernstein suggests confidence in Eternal's growth trajectory, even amid leadership changes. The focus on operating earnings could provide a clearer picture of profitability as the company navigates its expansion.

Market Context Zomato's stock has shown resilience, climbing towards ₹300, indicating positive investor sentiment. The market seems to be reacting favorably to the company's operational performance and strategic adjustments.

Industry Context The food delivery and quick commerce sectors are rapidly evolving, with companies like Zomato adapting to changing consumer demands and competitive pressures. The leadership changes come at a pivotal time, potentially positioning Eternal for future growth.

Looking Ahead Investors will be watching closely to see how the new leadership impacts Zomato's strategy and performance in the coming quarters.