Eternal Limited

Consumer Cyclical — Internet Retail · NSE

₹325.30+₹2.30 (+0.71%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by negative free cash flow, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Eternal Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Eternal Limited, together with its subsidiaries, provides e-commerce platform services to restaurant partners, quick commerce merchants, delivery partners, theatres, sports facilities, event organizers, and users in India and internationally.

IndustryInternet Retail

SectorConsumer Cyclical

Employees21,995

Annual revenue₹54,364 Cr

How does it make money?

Turns over ₹54,364 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 21,995 employees supports ₹2.47 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.7%

Net margin0.7%

Revenue / employee₹2.47 Cr

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

What is its competitive advantage?Little sign of one

Returns on capital of 2.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE2.9%

ROE1.2%

Peer median ROE25.9%

What is the outlook?

28 analysts covering the stock expect revenue to grow about 46.4% and earnings to grow about 128.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+46.4%

Est. earnings growth+128.3%

Analysts28

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +673% while net margin moved -105% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+673%

Margin effect-105%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 692.1x is demanding — it needs sustained high growth to justify
✗ P/E is 23% above its own historical median of 561.2x — expensive by its own standards
✗ P/B of 9.62x is a steep premium to book

Quality vs. Valuation

Company Quality

61/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

23/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

692.1x

2Y Median

561.2x

28 monthly readings · mean 593.9x · range 394.8x–841.3x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 23% above its 2y median of 561.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 900% above the peer median of 69.2x.

vs. its own history

Expensive

561.2x median over 28 months · +23%

vs. sector peers

Expensive

69.2x median of 4 peers · +900%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

692.1x

P/B

9.62x

EV/EBITDA

152.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -9.4% to 3.7% over 3 years.
Return on equity is rising
ROE has improved from -5.0% to 1.2%.
Return on capital is rising
ROCE has improved from -4.8% to 2.9%.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention4

Debt is rising
Total debt is up 806% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 2528% against revenue growth of 673% — stock may not be moving.
Valuation above its historical average
At 692.1x the stock trades 23% above its own median of 561.2x.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 806% over 3 years, from ₹507 Cr to ₹4,592 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 2528% against revenue up 673% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.6x to 2.6x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,119 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -9.4% to 3.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 23% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 73% a year✓ 97.7% CAGR
Latest reported year was 182.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹1,119 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.6x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 1 neutral · 5 weak

Market Cap

₹3.00 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

692.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.62x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹0.47

Profitable

Profitable on a per-share basis

ROE

1.2%

Weak

Weak capital efficiency

ROCE

2.9%

Weak

Low return on total capital employed

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

182.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

233.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹1,119 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹325.3

P/E (Forward)

86.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

0.2%

Weak

Thin margins leave little room for error

Net Margin

0.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.77

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.24

Defensive

Steadier than the market

52W Range Position

84%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

326.9 / 323.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,035 Cr	₹12,114 Cr	₹20,243 Cr	₹54,364 Cr	+97.7%
EBITDA	-₹662 Cr	₹416 Cr	₹1,179 Cr	₹1,995 Cr	—
EBITDA Margin	-9.4%	3.4%	5.8%	3.7%	—
PAT (Net Profit)	-₹971 Cr	₹351 Cr	₹527 Cr	₹366 Cr	—
EPS	₹-1.2	₹0.4	₹0.58	₹0.39	—
ROE	-5.0%	1.7%	1.7%	1.2%	—
ROCE	-4.8%	1.7%	2.6%	2.9%	—
Total Debt	₹507 Cr	₹749 Cr	₹2,045 Cr	₹4,592 Cr	+108.4%
Free Cash Flow	-₹947 Cr	₹431 Cr	-₹628 Cr	-₹1,119 Cr	—

🟢 Revenue has grown at 97.7% a year over 3 years.

🟢 EBITDA has turned positive, from -₹662 Cr to ₹1,995 Cr.

🟢 EBITDA Margin has risen from -9.4% to 3.7% over 3 years (+13.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹971 Cr to ₹366 Cr.

🟢 EPS has turned positive, from ₹-1.2 to ₹0.39.

🟢 ROE has risen from -5.0% to 1.2% over 3 years (+6.2 pts).

🟢 ROCE has risen from -4.8% to 2.9% over 3 years (+7.7 pts).

🔴 Total Debt has grown at 108.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹40,736 Cr

Total Liabilities

₹9,763 Cr

Total Debt

₹4,592 Cr

Cash & Equivalents

₹993 Cr

Operating Cash Flow

₹632 Cr

Capex

-₹1,751 Cr

Shareholding (proxy)

Institutional Holding

50.1%

Insider Holding

21.8%

Corporate Actions

Next Earnings

21 Oct 2026

Analyst Consensus

Recommendations

29 Buy · 0 Hold · 3 Sell

Target Price (Mean)

₹370.59

+13.9% vs CMP

Target Range

₹220 – ₹506

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

4 mixed2 general

Zomato Share Price - Live NSE: ETERNAL Stock Price & Chart

Upstox, 16 Oct

Eternal Q2 Results: Date, Time, Earnings Schedule, Share Price History And More

NDTV Profit, 13 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

ETERNAL Share Price Falls as Zomato Valuation Stays in Focus

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Four key reasons why Goldman Sachs expects Eternal share price to rise 16% - CNBC TV18

LinkedIn, 29 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Food delivery stock to buy: Eternal shares - 36% returns in 6 months by Zomato parent | 22% more upside ahead?

Livemint, 11 Oct

Half Yearly Results, Half yearly Earnings for JTL Infra

The Economic Times, 16 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak8.7/20

🟡Financial HealthAdequate11.8/20

🟢GrowthStrong18.4/20

🟡ProfitabilityModerate7.1/15

🔴ValuationDemanding3.3/15

🟡RiskModerate5.7/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 73% a year97.7% CAGR
✓EBITDA margin holds above 2%3.7%
✗Debt / EBITDA stays below 2x2.3x
✗Free cash flow remains positive-₹1,119 Cr
✗Interest cover stays above 3x2.6x