Buy Eternal; target of Rs 300: Anand Rathi

Buy

Anand Rathi's research report on Eternal

Exceeding estimates, Eternal’s Q4 saw strong execution in Blinkit, with the GOV growing ~20.8% q/q, 134% y/y, and the contribution margin expanding ~10bps q/q, which is encouraging, given heightened competition and aggressive dark store addition (~294 added; ~40% of the total 1,301 stores added in the last two quarters). Adj. EBITDA loss widened q/q to ~Rs1.78bn, lower than the Street’s expectations. We believe losses have peaked and should taper ahead. In FD, growth was muted as expected (GOV down ~1.4% q/q, but up 16% y/y), with steady margin expansion (contribution/adj. EBITDA margins up 11bps q/q).

Outlook

We cut our FY26e/27e EBITDA ~37.6%/~14% and maintain our Buy rating, with a lower TP of Rs 300, assuming 35x FY27e EBITDA to FD, 2x/1.5x EV/GOV to QC/GO and 1x EV/Sales to Hyperpure.

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Eternal - 05052025 - anand