Why Are Brokerages Turning Bullish on Eternal After a Strong Q2FY26?
Post 2 of 10 — Eternal has emerged as a key beneficiary of India’s growing food delivery and quick commerce wave. Multiple brokerages, including Nuvama, BofA, Emkay, Elara, Goldman Sachs, and Morgan Stanley, have maintained a Buy or Overweight stance following the company’s robust Q2FY26 performance and aggressive store expansion plans.
Nuvama retained its Buy rating with a revised target price of ₹400 (earlier ₹320). Revenue growth surpassed consensus expectations, although EBITDA margin at 1.8% was below the estimated 2.7%, primarily due to higher marketing expenditure in the quick commerce segment. The firm expects margin improvement in the second half as promotional intensity eases.
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BofA Securities echoed a positive tone, maintaining its Buy rating and ₹400 target. The firm highlighted management’s confidence in reaching 2,100 stores by December 2025 (versus 2,000 earlier) and noted that commentary from the latest con-call was “constructive” on profitability improvement. BofA expects continued traction in quick commerce despite near-term margin drag.
Emkay Global raised its target price to ₹430 (from ₹330), maintaining a Buy recommendation. The report cited “better-than-expected” revenue performance, driven by strong growth in the quick commerce division and an accelerated shift to the owned inventory model, offsetting weaker margins in the food delivery business.
Elara reiterated its Buy rating with a target price of ₹415. It noted robust performance in both food delivery and quick commerce segments, with Blinkit’s order volume rising 137% YoY and the store network expanding to 2,100 outlets by December 2025. The brokerage expects Blinkit to reach breakeven by end-FY26 and forecasts strong earnings growth between FY27–28.
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Goldman Sachs maintained its Buy rating with a revised target of ₹390 (from ₹360). Although margins missed GS estimates due to higher user acquisition costs, the firm raised its order volume forecast by 8%, citing continued strength in Blinkit’s rollout and a benign competitive landscape.
Morgan Stanley also reiterated its Overweight call with a ₹330 target. The firm observed a 172% YoY revenue surge, driven by higher inventory penetration in the quick commerce model (80% versus an earlier estimate of 50%). It expects profitability to improve materially over the next four to six quarters as scale benefits kick in.
Overall, Eternal is positioning itself as one of India’s fastest-scaling digital commerce stories. Brokerages agree that the company’s strategic investments in store expansion, technology, and operational efficiency could drive multi-year growth, despite near-term margin compression.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, highlights that Eternal’s rapid store expansion and improving quick commerce margins reinforce the sector’s structural growth story. Investors may consider staggered exposure, focusing on profitability milestones and scaling momentum. Discover more expert analysis at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries
- Can Eternal Sustain Its Quick Commerce Momentum in FY27?
- Why Are Brokerages Raising Eternal’s Target Price Despite Margin Pressure?
- Is Eternal’s Store Expansion Strategy Delivering Operational Leverage?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
