Why Does Goldman Sachs Believe the Bear Case on Eternal Is Overdone?
About Eternal
Eternal, the parent entity of Zomato and Blinkit, operates at the intersection of food delivery, quick commerce and digital consumption. Over the past two years, the company has transitioned from a growth-at-any-cost narrative to a profitability and scale-led model.
Despite this evolution, investor sentiment has turned cautious amid concerns around competitive intensity and near-term growth moderation in quick commerce.
Goldman Sachs believes this caution is being excessively priced in. The brokerage highlights that the stock has corrected nearly 17 percent over the last three months, even as operational metrics continue to improve.
Goldman Sachs’ Key Arguments
🔹 Near-term slowdown fears in quick commerce are exaggerated.
🔹 Competitive pressure narrative on Blinkit margins is overstated.
🔹 Structural profitability trajectory remains intact.
🔹 Stock correction already prices in pessimistic assumptions.
Goldman Sachs acknowledges heightened competition but argues that scale economics, private labels and improved fulfilment density will drive margin expansion over time. The brokerage also notes that investor focus has shifted disproportionately to short-term growth metrics, ignoring medium-term operating leverage.
Participants often align exposure in new-age stocks through a Nifty Derivative Tip approach when sentiment swings sharply.
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Strengths
🔹 Market leadership in food delivery. 🔹 Rapid scale-up of Blinkit. 🔹 Strong data and logistics backbone. |
Weaknesses
🔹 Margin sensitivity to competition. 🔹 High investor expectation volatility. |
The brokerage maintains that execution discipline rather than growth optics will define valuation over the next phase.
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Opportunities
🔹 Margin expansion at scale. 🔹 Cross-platform monetisation. |
Threats
🔹 Aggressive discounting cycles. 🔹 Regulatory scrutiny. |
Valuation & Investment View
Goldman Sachs maintains a Buy rating with a revised target of ₹375. The brokerage believes the current valuation offers a favourable risk-reward for long-term investors.
Market participants often reference a BankNifty Derivative Tip during broader risk-on or risk-off rotations.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes Eternal’s valuation reset reflects sentiment excess rather than structural deterioration. Execution discipline and operating leverage remain the key long-term drivers. Deeper market insights are available at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided is for informational purposes only and should not be construed as investment advice.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
