Macquarie Equity Research has maintained its Underperform rating on Eternal Limited — the listed entity housing Zomato food delivery and Blinkit quick commerce — while cutting its target price 5% to ₹190 from ₹200 in its May 15, 2026 comparative note on Eternal and Swiggy titled “Head-to-Head: Eternal vs Swiggy (v.3) — Field of Dreams or Pyrrhic land grab?”
The target cut is modest relative to the 21% reduction applied to Swiggy, reflecting Macquarie’s relative preference for Blinkit over Instamart within the competitive quick commerce framework. But the maintained Underperform rating — and the structural arguments underpinning it — signal that the brokerage does not view the current valuation as adequately discounting the competitive risks ahead.
The Blinkit valuation debate
The central question for Eternal’s investment case is what Blinkit is worth. Macquarie estimates the implied valuation for Blinkit at $9-15 billion based on a bottom-up framework — taking the consensus overall Eternal valuation and subtracting the brokerage’s estimated value of Zomato’s food delivery business, leaving the residual as the implied Blinkit ascription. This range — $9-15 billion — is meaningful and the brokerage acknowledges that Blinkit’s underlying economics in mature cities are genuinely solid.
Blinkit’s own disclosures indicate that larger, more mature cities including Delhi NCR are approaching 5-6% steady-state adjusted EBITDA margins, with strong customer retention, improving throughput per store, and expanding wallet share even under elevated competitive conditions. Macquarie agrees these numbers are real and that the mature-market unit economics are encouraging.
The disagreement is with the extrapolation. Macquarie argues that the consensus is taking Blinkit’s best-performing city economics and applying them across the entire store network — assuming that all newer and smaller-city stores will converge to similar economics simply as a function of time and store maturation. The brokerage’s framework treats quick commerce as a physical inventory turn retail business with a delivery cost obligation — not a platform business like food delivery — and argues that micro-market dynamics matter in ways that city-level averages obscure. A store in a dense South Delhi neighbourhood and a store in a Tier 2 city expansion have fundamentally different economics, and the path from current portfolio-level losses to portfolio-level profitability is not linear.
Three structural concerns
Macquarie identifies three structural headwinds that it believes the consensus underweights.
The first is competitive intensity duration. The brokerage explicitly disagrees with the market’s view that quick commerce competition will resolve in quarters — it expects rising and persistent competitive pressure for years across multiple dimensions. Horizontal platforms — Amazon Now, Flipkart Minutes — are investing in fast delivery infrastructure that does not require building a dedicated dark store network from scratch, giving them a structural cost advantage in customer acquisition. BigBasket, with its existing grocery fulfilment infrastructure and Tata Group backing, has the strongest latent ability to close the loyalty loop through Tata Neu cashbacks and rewards — a capability that pure-play quick commerce operators like Blinkit and Instamart struggle to replicate without a wider ecosystem.
The second is the Zepto listing risk. Zepto’s IPO is expected in 2026, and Macquarie flags that its public listing will bring additional visibility and institutional investor attention to the competitive dynamics — potentially accelerating growth investment and marketing spend in a way that is negative for the economics of all existing players.
The third is the near-term growth driver shift. The past two years of gross order value growth in quick commerce have been driven primarily by store expansion and higher average order values. The next phase requires productivity improvement at existing stores — higher throughput per square foot, better inventory turns, and reduced wastage — which is a harder operational challenge than opening new dark stores in untapped pin codes.
Food delivery: take-rates near a peak
In the food delivery segment, Macquarie sees the Zomato-Swiggy duopoly holding but maintains its below-consensus growth forecasts — low-to-mid-teens gross order value growth versus the consensus approximately 20% assumption. The brokerage considers current take-rates at approximately 25% of order value as high and views Zomato’s food delivery margins as near a peak, limiting the upside from further take-rate expansion.
Swiggy trails Zomato by approximately 200 basis points on adjusted EBITDA margin at scale, though contribution margin economics per order are broadly similar between the two. Within the pair, Macquarie maintains a stronger relative probability of success for Blinkit over Instamart — making Eternal the less concerning of the two Underperform positions — but not a conviction sufficient to upgrade to Neutral or better.
At ₹190 target against a current trading level that reflects ongoing market debate about Blinkit’s long-term value, Macquarie’s position is that even Eternal’s relatively stronger quick commerce asset is priced in a way that does not leave adequate margin of safety for the competitive risks ahead.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.