Eternal shares rally 21% as brokers raise targets on strong quarterly execution
Shares of the food delivery and quick commerce major have surged on upgraded broker targets and robust first-quarter margins, signaling investor confidence in its path to sustained profitability despite intense market competition.
Eternal shares have rallied approximately 21 percent over the past month, including a 10 percent gain in just two sessions. The stock currently trades around Rs 306, remaining about 20 percent below its October peak of Rs 368.
International brokerages are increasingly bullish on the company’s first-quarter FY27 performance, citing a successful shift toward quality growth over aggressive market share expansion. Jefferies raised its target price to Rs 415, noting that food delivery growth accelerated alongside better-than-expected profitability.
The brokerage highlighted management’s confidence that competitive intensity in quick commerce has become predictable. Eternal’s Blinkit unit is avoiding short-term discounting strategies, accepting that the broader market might grow faster as a result of this disciplined approach.
CLSA maintained a High Conviction Outperform rating with a Rs 506 target price, implying 65 percent upside. The firm pointed to Blinkit’s faster Net Order Value growth and Zomato’s acceleration to its fastest pace in six quarters, largely insulated from emerging no-commission platforms.
Management has guided toward the higher end of its long-term margin expectations. The company reported an EBIT margin of around 4 percent and an adjusted EBITDA margin of approximately 6 percent.
These figures come despite near-term take rate increases failing to immediately boost contribution margins. Management attributed this lag to recent minimum wage hikes across several states and the capital expenditure associated with opening larger stores.
Motilal Oswal reiterated a positive outlook with a Rs 400 target price. The firm believes management’s long-term goals of 60 percent Net Order Value growth and a $1 billion EBITDA by FY29 are increasingly achievable.
Technical analysts observe a constructive medium-term trend for the stock. Hitesh Tailor at Choice Broking noted a bullish Golden Crossover, with the shares testing the Rs 305 to Rs 315 resistance zone after finding support near the 20-Day EMA.
Virat Jagad of Bonanza echoed this sentiment, pointing to a decisive breakout above the Rs 300 falling trendline on robust volumes. He identified immediate support at Rs 290 and Rs 284, with a sustained move above Rs 310 potentially extending the rally toward Rs 325.
