Eternal Shares Hit Record Highs: What's Working And What's Not — A Deep Dive Into Company's Performance

Shares of Eternal Ltd. hit a record high on Thursday, extending a strong run that has seen the stock soar 70% from its 52-week low and surge 325% over its issue price.

With a market capitalisation of Rs 3.26 lakh crore, Zomato's parent has now overtaken Titan, which has a market cap of Rs 3.11 lakh crore, and Tata Motors, with a market cap of Rs 2.62 lakh crore, cementing its place among India’s most valuable companies.

Amid the bullish performance of the stock, several brokerages remain optimistic about further gains. Out of 33 analysts tracking the company, 29 maintain a 'buy' rating and four suggest 'sell', according to Bloomberg data. The average 12-month consensus price target of Rs 331.19 implies a downside of 1.6%.

Motilal Oswal has set a price target of Rs 420, implying a 25% upside from the current market price of 337. CLSA and Jefferies see 24% and 19% potential gains, respectively, while JP Morgan’s target of Rs 390 suggests a 16% rise. Goldman Sachs, with the most conservative view, pegs the stock at Rs 360, still 7% above current levels.

The stock’s valuation, however, has raised eyebrows. Eternal trades at a hefty trailing twelve-month price-to-earnings multiple of 993x. Forward estimates look relatively more palatable, with FY26E PE at 409x and FY27E at 123x. Analysts caution that the stock is pricing in aggressive growth expectations, leaving little room for execution slips.

The stocks are rising, and the analysts are optimistic, but what is working for the new age company?

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Eternal’s quick commerce business, led by Blinkit, has been the star performer. Gross order value growth has consistently exceeded 120% year-on-year across the past five quarters, accelerating to 140% in the first quarter of this year. Operationally, Blinkit has doubled its monthly transacting users, although average gross order value per day per store has plateaued.

However, despite the growth in business and the stock market, the company’s food delivery segment is showing signs of fatigue. Growth has steadily declined from 27% year-on-year in the first quarter of the previous fiscal year to 16% in the first quarter of this financial year.

Compounding the challenge, competition in quick commerce is heating up with aggressive discounting. Amazon Now and Dmart Ready are offering discounts as high as 23%, compared with 15% at Blinkit, Zepto, and Instamart.

Interestingly, Eternal is drawing significant support from treasury income. In the first quarter of this fiscal year, adjusted Ebitda stood at Rs 172 crore, but treasury income contributed an even higher Rs 235 crore. This has led some analysts to dub Eternal a “treasury trader” rather than purely a consumer tech play.

Looking ahead, management has guided that food delivery growth is unlikely to exceed 20% in this financial year, though it should remain above 15%. Losses at Blinkit are expected to decline, with visibility on expanding the dark store network to 3,000, well above the earlier guidance of 2,000. Additionally, Eternal’s District business is seen as a potentially large-scale profitable venture in the coming years.