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HDFC Securities Institutional Equities
Brokerage firm HDFC Securities has reiterated its Buy rating on Eternal Ltd. following the company's Q4 FY26 results, citing sustained recovery in the food delivery business and improving profitability in quick commerce led by Blinkit.
The brokerage has maintained its target price of Rs 340 per share, implying an upside of nearly 34% from the current market price of around Rs 253.
Eternal Q4 Results
Overall, B2C net order value grew ~54% YoY (4.5% QoQ) to Rs 26,880 crore in Q4 FY26 (in-line). Eternal's food delivery (FD) sustained its recovery momentum with NoV increasing 18.8% YoY to Rs 9,760 crore (vs 16.6% in Q3; in-line), driven by a strategic focus on improving affordability across select consumer cohorts. FD adjusted Ebitdam (as % of NoV) remained largely stable QoQ at 5.5% (brokerage estimate: 5.6%), as improving revenue per order and operating efficiencies offset the shift toward lower-value orders.
No meaningful impact from the LPG shortage was witnessed yet. Management anticipates that FD growth will continue trending toward its long-term expectation of 20%+ YoY NoV growth, with margins sustaining in the 5–6% range.
Meanwhile, Blinkit's NoV moderated to 8.2% QoQ to ₹14,390 crore (brokerage estimate: Rs 14,700 crore), as Q4 is seasonally a weak quarter for quick commerce due to fewer operational days and a lower mix of long-tail categories (NoV grew 95%+ YoY in Q4). Despite the moderation in NoV growth, Blinkit's adjusted Ebitdam (as a % of NoV) improved by 23 bps QoQ to 0.3% (brokerage estimate: -0.3%), as underlying unit economics remained resilient even amid heightened competition. QC adjusted Ebitda profit stood at Rs 37 crore (vs Rs 4 crore in Q3 FY26; brokerage estimate: -Rs 42 crore).
Consolidated adjusted Ebitda grew 160% YoY to Rs 429 crore (brokerage estimate: Rs 331 crore), with adj. Ebitdam at 2.4% (brokerage estimate: 1.8%). The brokerage has revised its adj. Ebitda estimates upward for FY27/FY28 by ~10% each and maintained its Buy rating with an SOTP-based target price of Rs 340 per share (including 45x Mar-28 EV/Ebitda for FD and 1.5x Mar-28 NoV for Blinkit).
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