Goldman Sachs sees Eternal achieving $1 billion EBITDA by FY29; raises target price

Shares of Eternal, formerly Zomato, will be in focus heading into trade on Tuesday after international brokerage firm Goldman Sachs maintained a Buy rating and raised its target price by 11% to Rs 385 from Rs 345.

The new target price implies an upside of 15% from current market levels. The brokerage sees an increasing probability of the company achieving $1 billion in EBITDA by FY29. Blinkit NOV is expected to grow 17% QoQ and 71% YoY in Q2FY27, while its EBITDA margin is seen expanding by 30 bps to 0.9% of NOV, the brokerage said.

Food delivery NOV growth is estimated at 20% YoY, with margins broadly flat QoQ. Goldman Sachs also noted marginally lower competitive intensity in quick commerce compared with 1HCY26 and sees potential for food delivery market share gains after a period of stability.

Eternal Q1 results

The food delivery and quick commerce major reported a consolidated net profit of Rs 87 crore in the first quarter of financial year 2027, marking an 11% fall from Rs 98 crore posted in the same period last year. The net profit is attributable to the owners of the parent company.

The company's revenue from operations came in at Rs 20,211 crore, translating to a massive jump of 182% from Rs 7,167 crore posted in the corresponding quarter of the previous financial year, Eternal said in a regulatory filing.

On a sequential basis, net profit declined 47% from Rs 174 crore posted in the previous quarter. Revenue from operations, on the other hand, is up 17% from Rs 17,292 crore, the company's exchange filing showed.

Eternal now expects Blinkit's steady-state EBITDA margin to reach 6% of NOV, compared with its earlier estimate of 5-6%, driven by efficiencies from larger stores and warehouses, deeper assortments and better working capital management. The company expects net working capital days to decline from 18 days to 12 days in steady state. Nomura forecasts 57-74% year-on-year NOV growth and adjusted EBITDA margins of 0.9-2% in FY27-28F.

Jefferies said the June quarter highlighted the importance of quality growth rather than simply chasing market share. According to the brokerage, food delivery growth accelerated alongside stronger-than-expected profitability, while quick commerce delivered a healthy performance despite falling short of optimistic expectations.

The brokerage said the key takeaway was management's growing confidence that competitive intensity in quick commerce has become more predictable and that value-led food delivery is unsustainable. Blinkit is not pursuing a short-term discounting strategy, and management indicated that it is comfortable with the broader market growing faster as a result. Jefferies has a target price of Rs 415 on the stock.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.