Eternal CEO Exits Food Delivery Biz; Shares Slip Nearly 2% Amid Sector Slowdown

Eternal Ltd., the parent company of the popular food delivery platform Zomato, saw its shares register a decline of up to 1.7% on Thursday following the announcement of a key leadership change within its food delivery vertical. The development comes amidst a broader slowdown in the sector and ongoing competition for market share. As of 11:15 AM, the company’s share price is trading at ₹240.68, with a modest increase of 0.69%.

Leadership Transition Underway

Rakesh Ranjan has stepped down as CEO of Zomato’s food delivery unit, a role he assumed in May 2023. However, he will remain with the company in a different capacity. The move is part of Zomato’s routine leadership realignment. Founder Deepinder Goyal will oversee the food delivery business in the interim as the company assesses internal and external candidates for a permanent replacement. The development follows the recent exit of Rinshul Chandra, COO of the food delivery unit, earlier this month.

Market Response and Share Performance

Markets reacted to the news with Eternal's shares slipping 1.7% to their day's low of ₹235 early in the trade on Thursday. Currently the shares are trading at ₹240.68. Eternal's share performance over various recent periods has been mixed. Over the past year, the shares have gained 28.52%. However, on a year-to-date basis, they have seen a decline of 14.29%. 

Sector Headwinds and Competitive Pressures

The leadership change at Zomato comes amid a broader slowdown in the food delivery sector, which began in mid-November, according to outgoing CEO Rakesh Ranjan. The company faces intensified competition, with rival Swiggy increasing its market share to 43% in the October–December quarter, up from 42% previously. Despite the festive season, Zomato's food delivery growth remained muted, with Gross Order Value (GOV) rising just 2% sequentially to ₹9,913 crore, though year-on-year growth stood at 17%. Analysts warn that Zomato’s market share may be at risk as competitors ramp up rapid delivery offerings.

The coming months will be critical as Deepinder Goyal oversees the food delivery vertical and the search for a new permanent CEO concludes, all while navigating a competitive market and a slowdown in sector-wide demand.

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