- The stock entered a downtrend after April 23 following its earlier April rally, driven by concerns over high valuations
- Despite posting a 349% YoY growth in quarterly profits, there seems to be a growing investor focus on forward guidance, ongoing quick-commerce investments in Blinkit, competitive pressures, and sustainability of margins
- Eternal's subsidiary, Zomato's removal of "charges for price disparity" clause represents a notable reduction in the platform's negotiating power.
Eternal Ltd, the company behind the food delivery platform Zomato and the rapidly expanding quick-commerce service Blinkit, saw a significant rise in its share price through the initial weeks of April 2026. Yet, a noticeable shift in market sentiment occurred after April 23, leading the stock into a downward trend.
On April 28, when the Q4 FY26 earnings were announced, shares initially surged in early trading. However, they concluded the day with a minimal 0.3% gain. This turnaround suggests that investors harbored deeper concerns, even with what appeared to be strong quarterly results.
Why the Sudden Shift in Sentiment in April?
The primary factor driving the decline after April 23, which seems to be somewhat overlooked, isn’t related to broad economic trends or investors taking profits.
On April 23, Reuters reported that Zomato had agreed to drop its “charges for price disparity” clause, a contractual term that allowed the platform to fine restaurants that offered cheaper meals to dine-in customers than those listed on the app.
For an extended period, this clause was crucial in maintaining Zomato’s pricing consistency among its 300,000 listed restaurants. Its removal, influenced by demands from the restaurant sector, represents a notable reduction in the platform’s negotiating power.
While the market generally viewed this as a minor regulatory adjustment, this interpretation might be understating its significance. The clause was more than just a means of generating revenue, because it served as a foundational competitive advantage.
Its removal could introduce a gradual challenge because if establishments are free to offer lower prices to walk-in customers than those on the app, delivery platforms risk losing their distinct pricing advantage. The eventual effects on commission rates and customer loyalty warrant more consideration than current analyst assessments suggest.
Further complicating the situation, Reuters reported on April 17 that Flipkart, supported by Walmart, intends to launch into both food delivery and ticketing services in May. The latter directly positions it as a competitor to Eternal’s District platform. For those investors who believed Eternal’s competitive edge was expanding, these two rapid developments provided a dose of reality.
Understanding the Earnings Reaction
Eternal Ltd disclosed a robust Q4 performance. Net profit saw a remarkable 346% year-on-year increase, reaching Rs 174 crore, with operational revenue also rising substantially. Revenue from operations approximated Rs 17,292 crore, demonstrating considerable growth from the previous year. These outcomes surpassed analyst forecasts, largely due to consistent advancements in its core food delivery segment and the ongoing expansion of Blinkit.
However, the market’s subdued reaction following an initial surge indicates that investors may have been more attentive to future indicators rather than just the impressive headline figures. Discussions from management during the earnings call and within the shareholder letter likely brought attention to continuous investments in quick commerce. That has intensified competition, and is evolving margin pressures, which collectively moderated investor excitement.
While Q4 showed improvement, the full-year picture revealed strains from aggressive expansion, with some reports noting an annual profit decline amid Blinkit’s rapid growth costs.
Is a Deeper Correction Ahead?
Whether a deeper correction materializes depends on execution in the coming quarters. Eternal’s business model benefits from network effects and scale in India’s evolving consumption landscape, yet execution risks around competition and cost control remain material.
If management demonstrates improving unit economics at Blinkit without excessive cash burn, the downtrend could prove temporary. Conversely, any signs of slowing order growth or margin erosion could invite further selling.
Eternal Share Price Forecast
Eternal stock RSI hovers around 55, suggesting neutral territory without extreme overbought or oversold conditions. Immediate support lies near Rs 250, followed by Rs 246.40, which is the 20-day SMA. A decisive break below that level could open the door to deeper correction toward Rs 230 or the 52-week low zone around Rs 212. Resistance is stacked at 100-day SMA at Rs 265.48, followed by a stronger hurdle at Rs 270.
Eternal share price on the daily chart on April 26, 2026 with key levels of support and resistance. Created on TradingView
The decline was triggered by news that that Zomato dropped its price disparity penalty clause under restaurant pressure. Earlier, Flipkart signalled plans to enter food delivery and ticketing. Both competitive threats that the market had not fully priced in.
Not necessarily fundamental weakness, but a reassessment of growth sustainability. Intensifying rivalry and high valuations have prompted caution.
It depends on risk appetite. Attractive for long-term believers in India’s consumption story if unit economics improve, but near-term volatility from competition warrants caution over aggressive buying.
