HDFC Securities Upgrades Eternal to Buy with Rs 340 Target
Authored by baaballufabet.com, 03/04/2026
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 reflects analysts' confidence in the company's execution across food delivery, quick commerce via Blinkit, and emerging verticals amid India's expanding digital consumption market. Investors now eye Eternal's shift toward sustained profitability as a key draw in a competitive landscape.
Execution Strength Drives Multi-Vertical Expansion
Eternal outperforms peers through efficient scaling in food delivery and quick commerce, maintaining operational discipline in a crowded field. Strategic moves like the Gold membership program boost monthly transacting users and order volumes, signaling demand recovery. Infrastructure growth, especially Blinkit's addition of 250 dark stores, supports 10% quarter-on-quarter net order value increase, with average daily NOV per store at Rs 834,000.
Segment Performance Highlights Profit Path
Food delivery anticipates 20% year-on-year MTU growth, 24% order volume rise, and 18% net order value expansion, bolstered by platform fee hikes of 17-19% to counter fulfillment costs from wider delivery radii. Blinkit leads with supply chain advantages, approaching adjusted EBITDA breakeven as market share widens. The going-out segment via District app shows user traction in movies and experiences, with losses projected to ease from Q4 peaks and potential for USD 3 billion NOV by FY30 at 5% margins—value not yet reflected in pricing.
Financial Projections and Valuation Back Optimism
| 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 |
Margins expand via operating leverage, with EPS rising sharply. Sum-of-the-parts valuation assigns Rs 134 to food delivery (45x FY28 EV/EBITDA), Rs 166 to quick commerce (1.5x FY28 NOV), Rs 18 to going-out (1.0x GOV), and Rs 4 to Hyperpure and others, totaling Rs 340 per share.
Risks Tempered by Strategic Entry Points
Fulfillment costs from logistics strain margins, quick commerce faces rival pressure, and new verticals demand execution focus. Support lies at Rs 210-200, resistance at Rs 260-300. Medium- to long-term investors should accumulate on dips over 12-24 months for exposure to consumption trends with profitability gains.