Eternal Limited (ETERNAL.NS) stock analysis

In our weekly check, Eternal Limited is graded C (A to F). Of 23 checks on debt, profit, cash flow and trend: 14 pass, warnings: 1, red flags: 8.

About Eternal Limited

Eternal Limited is a Communication Services company (Internet Content & Information) based in India, listed on NSE as ETERNAL.NS.

What our checks show for ETERNAL.NS

Red flags

• Operating profit does not cover the interest bill (0x): interest is paid from cash or new debt.
• The gross margin fell by 67.5 points, to 18.4%: costs are rising faster than prices.
• The net margin is only 0.7%: little room if costs rise.
• Free cash flow is negative (-2.1% of revenue): the business spends more cash than it brings in.
• The price is 588 times earnings (P/E): the market already pays for a lot of future growth.
• The stock has fallen as much as 74% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 0.3%.
• Pay in shares equals 0% of free cash flow: it dilutes shareholders.

Warning signs

• Earnings per share fell 30.7% a year over the last 3 years.

Strengths

• Net debt is only 1.2x a year of EBITDA: the balance sheet has room.
• The net margin rose by 30 points over 5 years, to 0.7%.
• Operating cash flow is 1.73x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 145% a year over the next years.
• Analysts expect revenue to grow about 56.1% a year over the next years.
• Analysts expect the net margin to improve by 2 points from today's 0.7%.

Similar companies

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Questions

What grade does Eternal Limited (ETERNAL.NS) have?

In our weekly check, Eternal Limited is graded C (A to F). Of 23 checks on debt, profit, cash flow and trend: 14 pass, warnings: 1, red flags: 8. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of ETERNAL.NS stock?

This week's biggest flags for Eternal Limited: Weak interest cover, Gross margin falling, Thin margins. In total 9 of 23 checks show a warning or a red flag.

What does Eternal Limited do?

Eternal Limited is a Communication Services company (Internet Content & Information) based in India, listed on NSE as ETERNAL.NS.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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