HDFC Securities Upgrades Eternal to Buy with Rs 340 Target Price
Authored by freebet.icu, 03 Apr 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 market price of Rs 229. This move reflects analysts' rising confidence in the company's path to long-term profitability amid strong execution in food delivery, quick commerce via Blinkit, and emerging segments. Investors now eye Eternal as a key play in India's expanding digital consumption market.
Dominant Performance Fuels Growth Across Verticals
Eternal outperforms peers in food delivery and quick commerce through efficient scaling and operational control in a fiercely competitive environment. Strategic moves like the Gold membership program boost monthly transacting users and order volumes, signaling renewed demand. In food delivery, analysts forecast 20% year-over-year MTU growth, 24% order volume increase, and 18% rise in net order value, driven by higher engagement despite challenges like LPG shortages and wider delivery radii.
The company counters cost pressures with 17-19% platform fee increases and higher minimum order thresholds for discounts, aiming to stabilize margins and improve unit economics.
Blinkit Leads Quick Commerce Expansion
Blinkit's integrated supply chain gives it an edge over rivals struggling with unit economics, supporting ongoing market share gains. Plans for 250 new dark stores should deliver 10% quarter-on-quarter net order value growth, with average daily NOV per store at Rs 834,000. This segment approaches adjusted EBITDA breakeven, a pivotal step toward profitability.
In the going-out vertical, via the District app, user traction builds in movies and live events, with losses peaking at Rs 1.2 billion in Q3 before sequential moderation. Management sees potential for a USD 3 billion NOV business at 5% EBITDA margin by FY30, yet current valuation assigns it minimal weight.
Financial Projections and Sum-of-the-Parts Valuation
Revenue grows sharply to Rs 545,603 million in FY26E, reaching Rs 1,181,771 million by FY28E, with adjusted EBITDA margins expanding from 2.0% to 3.2%. EPS rises from Rs 0.3 to Rs 2.2 over the same period, highlighting a shift to profitable expansion.
| 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 |
The Rs 340 target derives from sum-of-the-parts: food delivery at 45x FY28 EV/EBITDA yields Rs 134 per share; quick commerce at 1.5x FY28 NOV adds Rs 166; going-out at 1.0x GOV contributes Rs 18; Hyperpure and others Rs 4.
| 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 Tempered by Strategic Entry Points
Near-term margin strains from fulfillment costs and competition in quick commerce pose challenges, alongside execution demands in new verticals. Support levels sit at Rs 210-200, with resistance at Rs 260-300. Analysts recommend accumulating on dips for medium- to long-term horizons of 12-24 months, capitalizing on undervalued growth engines in India's digital ecosystem.