Buy Eternal; target of Rs 310: ICICI Securities

BUY

ICICI Securitie`s research report on Eternal

Adjusted EBITDA profitability in Q4FY25 was above our estimates (act. INR 0.7bn vs. est. INR 0.1bn). This was achieved by containing quick commerce (QC) losses despite adding 294 dark stores and 1mn sq.ft. warehousing space in a quarter with seasonally lower AOV (-5.9% QoQ). We think this was due to a combination of: 1) better mix; 2) limiting expansion to new cities; and 3) sustained improvement in ad revenues.

Outlook

However, management has cautioned about rising competition from non-QC channels. It has also started reporting NOV (GOV-discounts) to improve transparency on pricing power. In food delivery, management clarified that growth pangs were not indicative of a structural issue. We believe QC margin is likely to improve from Q1FY26E. Hence, we maintain BUY with a TP of INR 310.

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