Shares of Eternal Ltd., the parent company of food delivery aggregator Zomato and quick commerce operator Blinkit, fell as much as 1.5% in response to their September quarter results on Thursday, October 22. The numbers were reported during the Closing Auction Session (CAS) on Wednesday.
33 analysts currently have coverage on Eternal, of which 30 have a “buy” recommendation and three others have a “sell” rating. The consensus estimates of price targets implies an upside potential of 21% from current levels.
Motilal Oswal Sees 35% Upside For Eternal
While Eternal’s food delivery business is stable, Blinkit continues to offer a long runway to participate in the structural shift in retail, grocery and e-commerce, Motilal Oswal wrote in its note.
The brokerage has trimmed its financial year 2027 Earnings Per Share (EPS) estimate, driven by a higher tax rate in the second quarter, as all tax shields at the standalone parent level have been exhausted in carried forward losses in financial year 2027.
“We continue to factor in management’s long-term growth trajectory of 60%+ NOV growth for the QC business, along with gradual margin expansion through store maturity and operating leverage,” Motilal Oswal wrote in its note.
Motilal Oswal has a “buy” rating on Eternal with a price target of ₹420, indicating an upside potential of 35% from current levels.
JPMorgan Also Sees 35% Upside For Eternal
JPMorgan also maintained its “overweight” rating on Eternal with a price target of ₹420.
The firm wrote in its note that Eternal appears confident of sustaining at least 20% year-on-year growth in the Food Delivery business by holding margins over the next one to two years.
That confidence stems from the recovering payback periods despite competition and success in smaller cities and new stores around newer categories, the firm wrote.
CLSA’s “High-Conviction” On Eternal
CLSA has a “high-conviction” outperform rating on Eternal with a price target of ₹506, which is the highest on the street for the stock.
The firm has made significant changes to its financial year 2027-2027 Profit After Tax (PAT) assumptions by 38% to 78% to reflect faster store roll-out and marketing expenses.
It now expects steady-state profitability to be achieved only in financial year 2029 and not 2028 as assumed before.
Bernstein Sees Upside Risks To Eternal’s Growth Outlook
Bernstein has an “outperform” rating on Eternal with a price target of ₹350.
The firm wrote that the key message which the management wants as takeaways for investors include the fact that quick commerce is encroaching on the e-commerce space and the industry will have to update its definition.
The Quick Commerce Total Addressable Market and Serviceable Addressable Market (SAM) are larger than expected and hence Blinkit’s growth can be higher for longer. Bernstein, therefore, sees upside risks to the company’s financial year 2026-2029 Net Order Value Compounded Annual Growth Rate (CAGR) guidance of over 60%.
How Did Eternal Fare In The September Quarter?
Eternal’s food delivery Net Order Value grew by 21.5% during the quarter, higher than the street expectations of 18% to 20% growth. The Quick-Commerce business, Blinkit, grew 79% year-on-year, while the street expected 80% growth. Net Order Value in the Going Out business grew 58% during the quarter.
The management expects the Food delivery market to keep compounding at 20% for many years and it also aims to cross 3,500 Blinkit stores by March 2027 with the current plan pointing to 5,000 stores by March 2028.
Mature cities for Blinkit are already operating at an adjusted EBITDA margin of over 5% and the management is confident that margins will keep improving even during this expansion phase.
Shares of Eternal are looking to recover from the lows of the day, currently trading 1.2% lower at ₹308.65. The stock is still up around 10% so far this year.