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Shares of Eternal are fluctuating between gains and losses on Thursday, July 23, a day after the company's June-quarter results, which were a mixed bag.
However, the results prompted brokerages to reiterate their bullish stance, with CLSA seeing nearly 75% upside on the stock following strong growth in both food delivery and quick commerce.
Eternal reported revenue of ₹20,211 crore for the quarter
, ahead of the Bloomberg consensus estimate of ₹19,850 crore. Net profit declined to ₹92 crore from ₹174 crore in the previous quarter.
Earnings before interest, tax, depreciation and amortisation (EBITDA) came in at ₹594 crore, below the poll estimate of ₹670 crore, while EBITDA margin stood at 2.9% compared to the expected 3.4%.
Operationally, net order value (NOV) in the food delivery business grew 20% year-on-year, while Blinkit's quick commerce NOV surged 86%. The going-out business recorded 60% NOV growth, while losses at District narrowed to ₹65 crore from ₹81 crore in the preceding quarter. Blinkit added 200 dark stores during the quarter, taking its network to 2,443 stores.
Management said quick commerce demand remains robust and that while competitive intensity remains high, it has become more predictable. It also raised Blinkit's long-term adjusted EBITDA margin target to 6% of NOV from the earlier 5-6%, driven by efficiencies from larger stores, warehouses, deeper assortments and working capital optimisation.
CLSA Sees The Highest Upside
CLSA reiterated its "High Conviction Outperform" rating on Eternal and raised confidence in the company's execution following the June-quarter results. The brokerage has a target of ₹506 on the stock, implying an upside of nearly 75% from Wednesday's closing price of ₹289.50.
The brokerage said both food delivery and quick commerce delivered growth acceleration alongside better profitability despite elevated competition. It also highlighted Blinkit's improving profitability and cash generation, while newer businesses such as District and Bistro continue to broaden the ecosystem and drive customer engagement.
JPMorgan 'Overweight' on Eternal
JPMorgan maintained its "Overweight" rating with a target price of ₹390, implying an upside of about 35%.
The brokerage said the quarter was largely in line but marked by accelerating growth across quick commerce, food delivery and District. It highlighted Blinkit's resilient customer traction, with quick commerce NOV rebounding 19% sequentially and EBITDA margin improving despite heightened competition.
JPMorgan also noted management's view that competitive intensity has likely peaked and has become more predictable. It expects Blinkit's higher long-term EBITDA margin target and increased capital expenditure per store to support future growth.
Jefferies reiterates 'Buy' rating
Jefferies retained its "Buy" rating with a price target of ₹415, implying an upside of around 43%.
The brokerage said the quarter reinforced management's strategy of prioritising profitable growth over chasing market share. It noted that food delivery delivered better-than-expected profitability, while Blinkit's performance remained healthy despite aggressive competition.
Jefferies added that management does not favour short-term discounting and believes value-led competition in food delivery is unlikely to be sustainable.
Nomura bets on improved Blinkit Profitability
Nomura maintained its "buy" rating with a target of ₹350, implying an upside of nearly 21%.
The brokerage highlighted continued acceleration in food delivery and a rebound in quick commerce growth alongside improving profitability.
It expects Blinkit's revised long-term EBITDA margin target to be supported by operational efficiencies and forecasts 57%-74% year-on-year NOV growth with adjusted EBITDA margins of 0.9%-2% over FY27-FY28.
HSBC Confident on FY27 Estimates
HSBC reiterated its "Buy" rating with a target price of ₹340, implying an upside of around 17%.
The brokerage said strong growth across food delivery and quick commerce, coupled with improving margins, reinforces confidence in its FY27 estimates. It believes Eternal's earnings can compound at a 15%-20% CAGR over the medium term.
Street Remains Bullish on Eternal
According to Bloomberg data, 31 of the 34 analysts tracking Eternal have a 'Buy' recommendation, while three recommend 'Sell'.
Shares of Eternal are trading 0.6% lower on Thursday at ₹282.9. The stock has now turned positive on a year-to-date basis, having gained 10% in the last one month.
