Eternal Ltd. (ETEA.BO): In line 1QFV27: Rising margins should reduce competition concerns; further upside if growth closer to guidance; Buy

Research evidence excerpt

Eternal Ltd. (ETEA.BO): In line 1QFV27: Rising margins should reduce competition concerns; further upside if growth closer to guidance; Buy

Goldman Sachs Eternal Ltd. (ETEA.BO)

largely unchanged, with overall B2C NOV estimates 1-2% higher. We have cut our FY27

adjusted EBITDA estimate for Zomato by 6%, but have modestly raised our FY28/FY29

estimates on higher NOV. FY27 net income has also seen a sharp cut, though EPS is

broadly unchanged in outer years (Exhibit 17). Our 12m target price for Zomato moves

to Rs345 (from Rs350).

Expectations for 2QFY27/FY27: We expect Blinkit’s 2QFY27 (Sep ‘26) NOV growth at

14% qoq (68% YoY), with food delivery growth stable at 20% YoY; we expect margins to

improve for both segments vs 1Q. For full year FY27, we expect 70% YoY NOV growth for

Blinkit, with 1% adjusted EBITDA margin (on NOV) for the segment.

Valuations: Zomato trades at 85x FY28E P/E, and 45x EV to adjusted EBITDA (Exhibit

15); this is at the higher end of our India internet and global food delivery coverage.

However, at 40% FY26-28E NOV CAGR, Zomato is the fastest growing company within

its listed peer group, and adjusted for earnings growth, Zomato’s multiples are at the

lower end of the peer group (Exhibit 16). We remain Buy rated with 22% potential upside

on the stock.

Quick commerce: Strong growth with expanding margins

n Blinkit reported annualized NOV of Rs685 bn (US$7.2 bn) in 1QFY27; NOV growth

of 19% qoq (86% YoY; Exhibit 1) accelerated vs the previous quarter (was 8%

qoq/95% YoY) largely due to seasonality. Growth was MTU driven, with net adds

seeing an acceleration for two consecutive quarters. Blinkit expects NOV growth to

remain robust, a function of assortment expansion in the top 8 cities and geographic

expansion in the 30 cities beyond top 8.