HDFC Securities has upgraded Eternal to a Buy rating while holding its target price at Rs 340, implying over 48% upside from the current price of Rs 229. This move highlights the company's strong execution in India's digital consumption space, spanning food delivery, quick commerce via Blinkit, and emerging verticals. Investors now eye Eternal's path to profitability amid accelerating user growth and infrastructure expansion.
Execution Drives Growth Across Core Verticals
Eternal outperforms peers through efficient scaling in food delivery and quick commerce. In food delivery, monthly transacting users should rise 20% year-over-year, with orders up 24% and net order value growing 18%. Blinkit leads with supply chain advantages, adding 250 dark stores for 10% quarter-on-quarter net order value growth at Rs 834,000 daily per store.
The going-out segment, via the District app, shows healthy engagement in movies and live experiences. Adjusted EBITDA losses here peaked at Rs 1.2 billion in Q3 but will moderate from Q4, with potential to reach a USD 3 billion net order value business at 5% EBITDA margin by FY30. Strategic moves like the Gold membership program boost user acquisition and order frequency.
Financial Projections Signal Margin Expansion
Revenue forecasts point to Rs 545,603 million in FY26E, climbing to Rs 1,181,771 million by FY28E. Adjusted EBITDA rises from Rs 10,913 million to Rs 37,230 million over the same period, lifting margins from 2.0% to 3.2%. Earnings per share accelerates to Rs 2.2 by FY28E.
| Metric | FY26E | FY27E | FY28E |
|---|---|---|---|
| Revenue (Rs mn) | 5,45,603 | 8,85,305 | 11,81,771 |
| Adj. EBITDA (Rs mn) | 10,913 | 24,777 | 37,230 |
| Adj. EBITDAM (%) | 2.0% | 2.8% | 3.2% |
| EPS (Rs) | 0.3 | 1.3 | 2.2 |
Valuation Underpins 48% Upside Potential
A sum-of-the-parts analysis values food delivery at 45x FY28 EV/EBITDA for Rs 134 per share, quick commerce at 1.5x FY28 net order value for Rs 166, going-out at 1.0x gross order value for Rs 18, and Hyperpure plus others at a sales multiple for Rs 4—totaling Rs 340 equity value. Blinkit nears adjusted EBITDA breakeven, while platform fee hikes of 17-19% and higher minimum orders counter fulfillment cost pressures from extended radii and LPG shortages.
| Segment | Valuation Basis | Per Share Value (Rs) |
|---|---|---|
| Food Delivery | 45x FY28 EV/EBITDA | 134 |
| Quick Commerce | 1.5x FY28 NOV | 166 |
| Going-Out | 1.0x GOV | 18 |
| Hyperpure & Others | Sales Multiple | 4 |
| Total Equity Value | 340 |
Risks include rising fulfillment costs, quick commerce competition, and execution in new verticals. Support lies at Rs 210-200, resistance at Rs 260-300. Medium- to long-term investors should accumulate on dips for this multi-vertical growth story.