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HDFC Securities Report
HDFC Securities has upgraded Eternal to a Buy rating, citing its continued preference over peers across both food delivery and quick commerce segments.
In the food delivery business, the brokerage expects key operating metrics to improve from a low base, with monthly transacting users, order growth and net order value likely to rise 20%, 24% and 18% YoY, respectively. This improvement is expected to be driven by the benefits of the aggressive Gold membership programme rolled out in Q2 FY26, which is beginning to support stronger user acquisition.
While recent LPG shortages have led to some menu restrictions, HDFC Securities notes that the impact on volumes remains minimal so far. However, there could be some near‑term pressure on margins, which is not yet factored into estimates, due to potentially higher fulfilment costs as platforms expand delivery radii to protect volumes. That said, pre‑emptive platform fee hikes of 17–19% and higher minimum order values for discounted sales are expected to help safeguard profitability, according to channel checks.
In quick commerce, Blinkit is likely to continue gaining market share, as peers remain focused on solving unit economics. Blinkit, on the other hand, is benefiting from its broader supply chain, disciplined expansion strategy, and better balance between growth and profitability.
For Q4, HDFC Securities expects NOV growth of around 10% QoQ, supported by network expansion, including around 250 dark store additions, along with stable order per day trends and near operational break‑even.
Reflecting the improved outlook, the brokerage has raised its FY27 and FY28 adjusted Ebitda estimates by around 3% each. Eternal has been upgraded to Buy, with an SOTP‑based target price of Rs 340 per share, valuing the food delivery business at 45x FY28 EV/Ebitda and Blinkit at 1.5x FY28 NOV.
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