Goldman Sachs has maintained its ‘Buy’ recommendation on Eternal and raised its price target to ₹385 per share from its previous target. The revised target implies a potential upside of around 16% from the stock’s Monday closing price of ₹331.25.
The brokerage continues to view Eternal as one of its top picks in India’s internet sector, citing four key factors that could support the stock going forward.
First, Goldman Sachs sees greater visibility with each subsequent quarter into Eternal’s $1 billion FY29 EBITDA guidance. The brokerage believes continued progress towards this target could drive further multiple re-rating.
Second, the brokerage sees early signs of market-share gains in food delivery after several quarters of stable market share. It also expects Eternal to continue improving margins in the business.
Third, Goldman Sachs sees sustained strength in Blinkit’s growth. It said there could be significant upside if Blinkit delivers on its three-year 60% net order value (NOV) compound annual growth rate (CAGR) guidance, compared with the brokerage’s estimate of 45%.
Fourth, the brokerage sees further optionality from Eternal’s newer businesses, including Going-Out.
Eternal was also included in Bernstein’s India model portfolio in August last month. Bernstein said the company continues to demonstrate competitive strengths in a sector where raising capital is becoming increasingly difficult.
Among analysts tracking the stock, 31 of 34 have a ‘Buy’ recommendation, while three have a ‘Sell’ rating.
Eternal shares ended Monday’s session 1.12% lower at ₹331.25. Despite the recent weakness, the stock has gained around 17% so far this year.