Eternal shares get $2 billion shock after Q3 results, but target price goes up to Rs 480. Buy or sell?
The paradox deepens as Blinkit delivered positive EBITDA at a time when competitive intensity seems to be near its peak, while CEO Deepinder Goyal stepped down, passing the baton to Albinder in a leadership reshuffle that may have spooked some investors.
Jefferies set the street-high target of Rs 480, betting big on the quick commerce story. “In our base case, we expect a ~16% CAGR in food delivery revenue over FY25-28. Unit economics to steadily improve with scale as Eternal unlocks cost efficiencies and as customer willingness to pay for convenience increases,” the brokerage said.
Jefferies values Eternal’s food delivery business at 40x Mar-28E adjusted EBITDA, quick commerce at 2.5x Mar-28E revenues, and Going-Out at 1.5x GOV to arrive at a price target of Rs 480.
“The surprise factor continues with two big major updates. First, Blinkit delivered positive Ebitda at a time when competitive intensity seems to be near its peak, reflecting the underlying strength of the business; factors like higher AOV, mix, move to 1P, and past investments helped. The second update is Deepinder Goyal stepping down as CEO, passing the baton to Albinder. However, nothing changes in the short term, as both will continue with their current responsibilities,” Jefferies noted.
Morgan Stanley, Kotak raise target price
Morgan Stanley increased its price target by 0.9% to Rs 420, citing stronger EBITDA projections. “We increase our consolidated adjusted EBITDA estimate for F26 by 20%, due primarily to break-even guidance in the QC business, but maintain F27 and F28 as we believe it is too early to extrapolate the sharp improvement in profitability going forward,” the brokerage said.
“We raise our steady state margin assumptions in the QC business marginally, which offsets our reduced GOV/NOV estimates. We roll our valuation forward by three months to Dec-26, and our PT rises by 0.9% to Rs 420.”
Domestic brokerage firm Kotak Equities raised its fair value to Rs 410 from Rs 400, highlighting Blinkit’s ahead-of-schedule profitability. “Blinkit’s 3QFY26 NOV growth was 121% yoy/14% qoq, largely in line with estimates, with the segment achieving adjusted EBITDA breakeven ahead of expectations,” the firm said.
Blinkit added 211 stores sequentially and will reach 3,000 stores by March 2027, with a further scale-up to 3,500-4,000 stores. “Zomato’s food delivery NOV growth was at 16.6% yoy and was higher than expected. Food delivery’s EBITDA margin of 5.4% of NOV was its highest ever. We believe growth across business remains robust with progress in profitability for Blinkit and Hyperpure. We roll forward to March 2027 and retain BUY with a revised SoTP-based FV of Rs410,” Kotak said.
BofA has raised the price target marginally to Rs 405 from Rs 400, keeping Eternal as a top pick in the APAC Internet space.
In a sharp contrast, Emkay cut its target price by 14% to Rs 370 from Rs 430, warning of intensifying competition. “We believe that during a land-grab phase, companies should prioritize market share over margins to build scale that can be monetized over time. Eternal’s results underscore that QCom can be highly profitable at scale and Blinkit’s execution remains strong. We expect competitive intensity to increase in the QCom business and Eternal to focus more on market share, which will lead to slower margin expansion in FY27 and FY28. Thus, we cut our TP by ~14% to Rs 370,” the brokerage said.
“We remain convinced about the long-term opportunity in QCom in India, strong underlying unit economics of the business at maturity, and Blinkit’s superior execution versus other players. However, we are concerned about the near-term increase in competitive intensity due to new entrants. The QCom industry is in a land-grab phase, which means that the path to optimal profitability will be slow, and volatile, in our view. The stock trades at 38x FY28 EV/EBITDA. We maintain BUY, but cut TP by 14% to Rs 370.”
With target prices ranging from Rs 370 to Rs 480, a divergence of nearly 30%, the Street is split on whether Blinkit’s profitability milestone justifies the premium or whether the land-grab phase will compress margins.
