Eternal , a prominent player in the quick-commerce and food delivery space, witnessed a significant reshuffling of its investor base during the June quarter, marked by divergent trends among institutional and retail investors.

Institutional Investors' Movements

Foreign institutional investors (FIIs) continued their selling streak for the seventh consecutive quarter, reducing their stake in Eternal from 44.40% to 42.30%. This persistent sell-off by FIIs signals a shift in their investment strategy or outlook towards the company.

In stark contrast, mutual funds substantially increased their ownership in Eternal. Their stake rose from 15.50% in December to an impressive 21.60% in June, indicating a strong vote of confidence in the company's prospects and business model.

Retail Investor Exodus

The June quarter also saw a notable decrease in retail investor participation. Individual investors reduced their holdings from 6.40% to 5.50%, with approximately 300,000 retail investors exiting their positions in Eternal. This movement suggests a change in sentiment among smaller investors or potentially a reallocation of their portfolios.

Blinkit's Strong Performance

Amidst these ownership changes, Eternal's quick-commerce arm, Blinkit, delivered robust quarterly results. The company reported an impressive 140% year-on-year growth in Gross Merchandise Value (GMV), underscoring the rapid expansion of its quick-commerce operations.

Strategic Shift and Analyst Perspectives

Eternal announced plans to transition Blinkit to an inventory-led model over the next 2-3 quarters. Management anticipates this strategic shift will yield approximately 100 basis points of margin expansion, potentially improving the unit economics of the quick-commerce business.

The company's performance and strategic moves have caught the attention of major financial institutions:

• Goldman analysts noted potential market share gains for Blinkit in the quick-commerce space.
• Jefferies upgraded Eternal's stock, setting a target price of Rs 400.00, reflecting optimism about the company's growth trajectory.
• Emkay analysts highlighted the long growth runway for quick-commerce and expressed confidence in the food delivery business maintaining strong profitability.

Outlook

The contrasting movements in Eternal's investor base, coupled with Blinkit's strong performance, paint a complex picture of the company's current position. While the exit of FIIs and retail investors might raise questions, the significant increase in mutual fund ownership suggests strong institutional faith in Eternal's long-term prospects.

As Eternal continues to evolve its quick-commerce strategy and maintain its food delivery profitability, market participants will be keenly watching how these developments translate into financial performance and market valuation in the coming quarters.

Eternal Ltd (formerly known as Zomato Ltd) has reached a significant milestone, with its market capitalization soaring to ₹3 lakh crore, surpassing over 20 Nifty 50 constituents. The company's shares hit a record high of ₹311.60, driven by strong quarterly results and positive market sentiment.

Strong Performance Across Segments

Eternal Ltd reported impressive financial results for the quarter ended June 30:

• Consolidated revenue from operations grew by 70.4% year-over-year to ₹7,167.00 crore
• Profit before tax increased to ₹88.00 crore, up from ₹239.00 crore in the same quarter last year
• The company's quick commerce segment outperformed food delivery for the first time, contributing to nearly half of the annualized Net Order Value (NOV)

Segment-wise Performance

The quick commerce segment, which includes the Blinkit platform, has shown remarkable growth, with its NOV exceeding that of food delivery for the full quarter.

Strategic Developments

Eternal Ltd announced several key initiatives and changes:

1. Transition to inventory ownership in quick commerce, expected to improve margins by about 1 percentage point over time.
2. Incorporation of a new wholly-owned subsidiary, Blinkit Foods Limited, to engage in food services.
3. Expansion of quick commerce store network, with 243 new stores added in the quarter, bringing the total to 1,544 stores.
4. Launch of 'Greening India', an agroforestry initiative aimed at planting over 2.5 million trees across 10,000 acres of farmland.

Management Commentary

Deepinder Goyal, Managing Director and CEO, commented on the company's rotational leadership model: "We operate with a model we call Rotational Leadership, where the CEO role of each business is time-bound, typically for a two-year term. This approach brings structural agility to leadership, ensuring that no role becomes static and that fresh energy enters the system at regular intervals."

Market Position and Outlook

With its current valuation, Eternal Ltd has surpassed several Nifty 50 companies, including Wipro (₹2.72 lakh crore), Tata Motors (₹2.53 lakh crore), and Nestle India (₹2.38 lakh crore). The company's strong performance in quick commerce and strategic initiatives position it for continued growth in the evolving digital commerce landscape.

As Eternal Ltd continues to innovate and expand its services, investors and market watchers will be keenly observing its ability to maintain this growth trajectory and profitability in the coming quarters.