(Reuters) -Indian online delivery firm Eternal jumped nearly 15% on Tuesday after the parent of Zomato and Blinkit reported robust quarterly revenue, lifting expectations for continued growth in its quick-commerce business.
Blinkit, which promises everything from salt to iPhones in under 10 minutes, is widely seen as the front-runner by analysts despite growing pressure from players such as BigBasket, Flipkart, Swiggy and Amazon.
“We overestimated the competitive threat,” analysts at Jefferies said, citing the unit’s growth, improved margins and expectations of higher growth in the future.
At least ten brokerages hiked price targets on the stock after results, while at least four upgraded ratings, data compiled by LSEG showed.
The median price target on the stock has risen to 311 rupees from 287.5 rupees a month ago, the data showed.
Shares of the company rose 14.6% to 311.25 rupees as of 9:42 a.m. IST and were the top gainer on benchmark Nifty 50 index, which trading flat.
Shares of rival Swiggy were up 5.3% on the day.
Eternal’s food delivery business, Zomato, is its profitable arm and has historically contributed the larger share of revenue, but Blinkit is closing the gap fast.
Analysts at Nuvama said Blinkit “outshines on growth”, as Eternal’s quick commerce business posted a 127% on-year rise in net order value at 92.03 billion rupees ($1.07 billion), surpassing growth at its food-delivery business for the first time.
($1 = 86.2270 Indian rupees)
(Reporting by Manvi Pant; Editing by Nivedita Bhattacharjee)
