Eternal Ltd., the parent of Blinkit and a major food delivery platform, received a sharp endorsement from Jefferies as the brokerage upgraded the stock to ‘Buy’ and lifted its target price to ₹400/share, citing growing confidence in its margin outlook and recovery in food delivery growth.
Jefferies noted that Q1FY26 results were mixed, but called the management’s tone and commentary significantly encouraging, particularly as the company indicated it expects a pickup in food delivery performance, even as quick commerce (Blinkit) continues to deliver outsized growth.
“Growth remained strong and the margin outlook has improved as competitive pressure begins to ease,” Jefferies said in its note, adding that the short-term margin profile for food delivery may remain rangebound, but the company’s investment strategy appears to be paying off.
Jefferies also pointed out that cost efficiencies, smart allocation of capital, and high visibility on large addressable markets make the Eternal story more attractive now. The brokerage trimmed its near-term EPS forecasts slightly to reflect cost dynamics, but upgraded the stock as it now expects a 10% upside from current levels.
Eternal Q1FY26 financial highlights (YoY):
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Revenue: ₹7,167 crore, up 70.4%
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EBITDA: ₹115 crore, down 35%
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EBITDA margin: 1.6%, vs 4.2% in Q1FY25
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PAT: ₹25 crore, down 90.1%
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Other income: ₹354 crore, up 50%
Jefferies believes Blinkit will continue to be the growth engine for Eternal in FY26, while food delivery’s recovery and steady contribution margins could help stabilize overall profitability. The brokerage also said that shareholder sentiment may improve as Eternal demonstrates sustained traction in high-frequency commerce.
