Eternal shares jumped 6% in trade, drawing strong investor attention after brokerage firm JM Financial reiterated a bullish stance and advised investors to “aggressively accumulate” the stock. The rally comes despite recent volatility, with analysts viewing the correction as a strategic entry point for long-term investors.
The brokerage has maintained a ‘Buy’ rating on Eternal with an unchanged target price of ₹400. Based on recent levels, this implies a potential upside of nearly 73%, making it one of the more optimistic calls in the current market environment.
Why JM Financial Sees a Buying Opportunity
According to JM Financial, the recent sell-off in Eternal shares is not reflective of the company’s long-term growth potential. Instead, it presents an attractive valuation window for investors with a 12–18 month horizon.
While the brokerage has reduced its next twelve-month (NTM) price-to-earnings (PE) multiple to 65x from 75x—factoring in global macroeconomic pressures and rising competition—it has retained the ₹400 target price by rolling forward valuations to March 2027 estimates.
Blinkit: The Key Growth Driver
A major factor behind the bullish outlook is Eternal’s quick-commerce arm, Blinkit, which continues to scale rapidly.
JM Financial highlighted that Blinkit has built a strong competitive moat through its extensive infrastructure and operational efficiency. The platform currently operates over 2,000 dark stores, giving it a clear advantage in delivery speed and order fulfilment.
Unlike many competitors, Blinkit has also managed to maintain strong customer retention without relying heavily on deep discounting—an important factor in improving profitability over time.
The brokerage expects Blinkit to deliver nearly 80% growth in gross order value (GOV) by FY27, positioning it as the primary growth engine for Eternal.
Rising Competition but Strong Positioning
The quick-commerce space is becoming increasingly competitive, with major players accelerating expansion.
Platforms backed by Flipkart and Amazon are aggressively scaling operations. Flipkart’s “Minutes” is reportedly adding around 100 dark stores every month, while Amazon’s “Now” is opening roughly two stores per day.
Despite this intensifying competition, JM Financial believes Blinkit’s early-mover advantage and mature supply chain will help it sustain market leadership.
Food Delivery Concerns Seen as Overstated
JM Financial also addressed concerns around Eternal’s food delivery business, particularly supply-side disruptions linked to gas availability amid Middle East geopolitical tensions.
The brokerage noted that even in a worst-case scenario—where up to 25% of orders are impacted toward the end of a quarter—the segment could still deliver around 15% year-on-year growth.
This suggests resilience in demand and operational flexibility, reducing the overall downside risk to earnings.