Eternal shares up 6%; Elara says fee hike boosts outlook, sees 82% upside

Eternal share price today

Eternal share price rebounded sharply in Tuesday’s session, riding the overall broader market’s positive momentum and improved sentiment following a recent platform fee hike. The scrip jumped 5.9 per cent to an intraday high of ₹240.29 on the National Stock Exchange (NSE).  

As of 1:45 pm, Eternal shares were trading at ₹237.20, up 4.51 per cent, emerging as the second top gainer in the Nifty50 pack and outperforming the benchmark, which rose 2.36 per cent. 

On a year-to-date basis, the Eternal shares have slumped 16.3 per cent, as against a 12.3 per cent decline in the Nifty50 index.

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Why did Eternal share price advance today? 

Eternal share price witnessed a strong buying interest as the growth outlook improved for the food-delivery business after the company hiked Zomato’s platform fee by 20 per cent to ₹15 per order. Apart from this, the broader sentiment of the market was positive on Tuesday, which supported the upward momentum in the counter.  

Elara Capital’s view platform fee hike  

As per Elara Capital’s estimates, every ₹1 increase in the platform fee should yield Zomato a 26-basis-point positive impact on the take rate and an incremental adjusted Ebitda impact of ₹120 crore.  

“As a base case where the fee hike implementation is in 50 per cent of markets, the incremental platform fee should drive a 40-basis-point gain in the take rate, a 7.5 per cent uplift in the financial year 2027’s estimated adjusted Ebitda of ₹180 crore,” the brokerage said.

Zomato’s gross order value (GOV) may sustain

Eternal’s food delivery business, Zomato’s gross order value (GOV) will likely sustain momentum, according to Elara. The brokerage believes that the ₹15 platform is too low to trigger any sensitivity among its customers as the rate is only 3.1 per cent of Zomato’s estimated ₹475 average order value (AOV). Moreover, the fee is now the same as Swiggy’s, which indicates market parity; it is unlikely to disrupt existing order volumes.  

Notably, the platform fee hike will likely provide a cushion to any cost pressure, according to the brokerage.  

Zomato’s gross order value (GOV) rebounded sharply in the December quarter (Q3FY26) due to the comeback of monthly-transaction users (MTU). And history shows that Zomato’s adoption of a gradual platform fee hike did not disrupt GOV growth rate, Elara Capital said.  

Therefore, platform fee hike coupled with better user momentum will support Eternal’s food delivery business in elasticity and charge higher fee in the future, the brokerage said. 

Elara Capital maintained a ‘Buy’ rating on Eternal, with a target price of ₹415, factoring in the positive impact of the recent fee hike in its estimates. The target price implies an upside of 82 per cent from the previous close of ₹226.96. 

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(Disclaimer: View and outlook shared belong to the respective brokerage/analysts and are not endorsed by Business Standard. Readers’ discretion is advised.)