Shares of Eternal, previously known as Zomato, rose 2 percent to Rs 246 in morning trade on June 3 after Morgan Stanley reiterated as its top pick in the space, citing the company’s leadership in both food delivery and quick commerce, efficient cost structure, and a strong balance sheet that reduces the risk of further equity dilution.
The brokerage has maintained its price target at Rs 320, implying a 33 percent upside from current levels, and sees a potential floor at Rs 200–220, offering what it calls a compelling risk-reward profile.
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A key driver behind the bullish stance is the rising addressable market in quick commerce. With faster customer additions and an expanding city footprint, Morgan Stanley now estimates India’s QC market will grow to $57 billion by 2030, sharply higher than its earlier forecast of $42 billion. As a result, it has raised Eternal’s quick commerce gross order value estimates for FY26–28 by 9–11 percent.
Though the segment continues to face heavy competition, Morgan Stanley believes losses will peak this quarter, with margin recovery gaining pace from FY26 onward. In parallel, the food delivery business is also expected to deliver improved margins, aided by better monetisation and fixed cost absorption. Contribution margins here are projected to rise to 6 percent by FY28, up from 4.8 percent in FY26.
Eternal’s financials are forecast to improve sharply, with adjusted EBITDA climbing from Rs 1,079 crore in FY25 to Rs 6,548 crore in FY28. Net profit is expected to increase nearly tenfold to Rs 5,089 crore by FY28, driven by gains in both core delivery and adjacencies like Hyperpure.
The brokerage highlights three potential triggers for a re-rating: sustained growth in QC order volumes, continued improvement in food delivery margins, and a stable competitive environment over the next six months. With its market dominance, operating leverage, and expanding addressable market, Morgan Stanley sees Eternal as well-placed for long-term value creation and deserving of a premium valuation.
At about 9:20 am, shares of the company were trading at Rs 243, higher by 1 percent from the last close on the NSE. Eternal share price has risen 9 percent in the last one week.
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