Eternal shares rose 2% to Rs 316 on the BSE on Thursday after the Zomato and Blinkit parent reported a sharp increase in second-quarter profit. Brokerages maintained positive ratings, with Jefferies citing upside of 34%, as faster Blinkit expansion strengthened growth expectations but also shaped forecasts for margins.
Key Takeaways
- Q2 FY27 net profit increased 92.3% year-on-year to Rs 125 crore, while revenue rose 77.6% to Rs 24,138 crore.
- Blinkit raised its store target to 3,500 by the end of FY27, from 3,000 previously, and to 5,000 by FY28.
- Brokerages retained positive ratings, although Nomura lowered margin forecasts to reflect expansion spending and food delivery competition.
Table of Contents
- Eternal shares advance after quarterly earnings
- Blinkit expansion changes the growth-margin balance
- Food delivery prioritises reinvestment
- Brokerages raise targets and earnings estimates
- Conclusion
Eternal shares advance after quarterly earnings
Eternal's net profit for the second quarter of FY27 reached Rs 125 crore, compared with Rs 65 crore a year earlier. Revenue from operations increased to Rs 24,138 crore from Rs 13,590 crore in Q2 FY26.
Sequential operating performance also improved. Earnings before interest, taxes, depreciation and amortisation rose 26.6% to Rs 752 crore from Rs 594 crore in Q1 FY27. The reported EBITDA margin widened to 3.15% from 2.95%.
| Item | Details |
|---|---|
| Jefferies | Buy; target raised to Rs 430, with 34% upside cited in the source report. |
| Nomura | Buy retained; target of Rs 350, with 12% upside cited in the source report. |
| Morgan Stanley | Overweight retained; target raised to Rs 417 from Rs 373; named an Analyst Top Pick. |
| Nuvama | Buy retained; target raised to Rs 420 from Rs 360. |
Blinkit expansion changes the growth-margin balance
The larger Blinkit store rollout was central to the brokerage assessments. Nuvama said the quick-commerce business maintained growth momentum while its margin improved by 28 basis points quarter-on-quarter, supported by operating leverage and faster store additions.
Management increased its end-FY27 store target by 500 to 3,500 and set a target of 5,000 by FY28. Those figures are expansion goals, rather than completed openings.
Nomura raised its FY27 and FY28 net order value growth forecasts by around 8–10%, but reduced its FY28 adjusted EBITDA margin estimate by 70 basis points to 1.3% to account for aggressive store expansion. It expects additions to keep Blinkit's margins stable in the near term, with scale supporting improvement over a longer horizon.
Morgan Stanley said quick-commerce monthly transacting customer growth continued to surpass its expectations, helped by strong performance in smaller cities.
Food delivery prioritises reinvestment
Eternal said competition in food delivery remained intense. The company intends to hold margins stable in the near to medium term and reinvest any improvement into growth, while retaining its medium-term target of 20% year-on-year growth.
Nomura consequently lowered its food delivery adjusted EBITDA margin forecasts by 20–50 basis points. It expects net order value growth of 17–22% year-on-year in FY27 and FY28.
Nuvama described food delivery growth as strong but said margins had contracted slightly as management stepped up investment. According to the brokerage, the company expects margins to remain flat over the next one to two years.
Brokerages raise targets and earnings estimates
Jefferies increased its FY27–FY29 adjusted EBITDA estimates by 5–8%, pointing to Blinkit's expansion, improving unit economics, food delivery growth above 20% and greater confidence in District. It also highlighted Eternal's AI platform, dark.ai, as a development to watch, while noting that details remained limited and the outcome could be binary.
Morgan Stanley named Eternal an Analyst Top Pick. Its weighted target price increased 12%, driven by an approximately 16% rise in its base-case valuation.
Nuvama raised its FY27 and FY28 revenue estimates by 6.1% and 4.4%, respectively, and its EBITDA estimates by 11.6% and 3.6%. It said Eternal traded at 89 times estimated FY27 EBITDA and 43 times estimated FY28 EBITDA at the prevailing market price.
Conclusion
Eternal's quarterly results prompted higher brokerage targets and growth estimates, while the faster Blinkit rollout and food delivery reinvestment kept near-term margins in focus. The targets and forecasts are the brokerages' assessments, not guaranteed outcomes.
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