Brokerages lift Eternal targets as Blinkit’s profitability outlook improves

Jefferies, Citi and Morgan Stanley raised target prices after Eternal’s June-quarter results, citing food-delivery profitability and Blinkit’s execution. Analysts see limited need for aggressive discounting and a path to 5-6% steady-state quick-commerce margins, though Macquarie remains cautious on valuation.

— Source publishedThu, 23 Jul, 2026, 08:18 IST·First seen Thu, 23 Jul, 2026, 08:50 IST·Source NDTV Profit

What happened

Eternal Limited · Brokerages largely raised Eternal targets after June-quarter results, citing food-delivery profitability and Blinkit’s execution. They see

Key facts

  • Q1 net profit: Rs 92 crore vs Rs 25 crore YoY
  • Q1 revenue: Rs 20,211 crore vs Rs 7,167 crore YoY
  • Q1 EBITDA: Rs 594 crore vs Rs 115 crore YoY
  • Q1 EBITDA margin: 2.9% vs 1.6% YoY
  • Jefferies target: Rs 415 from Rs 400
  • Citi target: Rs 385 from Rs 360
  • Morgan Stanley target: Rs 373 from Rs 347
  • Macquarie target: Rs 190
  • Quick-commerce steady-state margin outlook: 5-6%

Why this matters

Eternal’s results reinforce the strategic value of integrated delivery ecosystems, where food-delivery cash generation can support scaled quick-commerce expansion.

What to watch

  • Blinkit quarterly GOV growth, order growth and average order value relative to peers.
  • Contribution-margin progression for mature stores and the drag from newly opened dark stores.
  • Dark-store additions, store density and expansion into lower-density cities.
  • Promotional intensity, delivery-fee changes and customer-acquisition spending by Zepto, Swiggy Instamart and other competitors.
  • Food-delivery EBITDA margin and cash flow, which determine Eternal's capacity to self-fund Blinkit.
  • Management commentary on the timeline and assumptions behind 5-6% steady-state quick-commerce margins.
  • Broker estimate revisions and whether valuation multiples rise faster than earnings forecasts.
  • Accelerate Blinkit dark-store rollout in high-density catchments where order frequency can support mature-store economics.
  • Prioritize basket-size growth, advertising, private labels and operational density over broad-based consumer discounting.
  • Use food-delivery cash generation to fund quick-commerce expansion while maintaining consolidated profitability discipline.
  • Highlight mature versus new-store contribution margins and cohort economics in upcoming disclosures to validate the 5-6% margin path.
  • Defend key urban micro-markets selectively if competitors intensify promotions, rather than matching discounts nationally.