Eternal share price target goes up to Rs 400! What brokerages said after Q1 results

Eternal shares rallied 15% to hit a fresh all-time high of Rs 311.6 on BSE, surpassing their previous peak of Rs 304.50, as investors celebrated Q1 results that delivered a stunning surprise on Blinkit performance. The Nifty stock's target prices have been dramatically revised upward, with top brokerages now eyeing Rs 400 as Blinkit is now bigger than Zomato in net order value (NOV) terms.

The euphoria around India's quick commerce darling reached fever pitch as management commentary marked a sharp departure from previous quarters' cautious tone, with brokerages scrambling to upgrade targets and ratings.

Jefferies made the most aggressive move, upgrading Eternal to Buy rating with a target price raised to Rs 400 and admitted that it overestimated the competitive threat.

“Eternal is a play on the growing food services industry in India and increasing adoption of digital commerce. With only ~23mn monthly transacting users currently, Eternal's food delivery has a long runway for customer acquisition and revenue growth. Blinkit is the market leader in the fast-growing quick-commerce space and is set to see sharp margin improvement in the steady state,” the global brokerage said.

While Q1 was mixed, management commentary was significantly positive, especially on quick commerce, a departure from earlier quarters, it noted.

Also Read | Blinkit beats Zomato in NOV terms: 10 key takeaways from Eternal Q1 results

Goldman Sachs jumped on the bandwagon, maintaining its Buy rating while raising the target price to Rs 340. The investment bank is raising B2C GOV estimates by up to 6% post 1QFY26 following Blinkit's explosive performance. "Blinkit's strong 1Q GOV growth (+25% qoq, in line with GSe), & new guidance of 3000 stores (timeline unspecified) suggests demand continues to stay elevated," Goldman analysts wrote in a note.

CLSA maintained its high conviction outperform rating with a target of Rs 385 and said the milestone of Blinkit becoming bigger than food delivery represents a seismic shift in Eternal's business dynamics.

The star of the show was undoubtedly Blinkit, which "registered strong 1Q results, with Blinkit reporting 140% YoY GOV growth and 50bps QoQ improvement in adjusted EBITDA margin," according to Emkay Global. The brokerage revised its target up 14% to Rs 330 from Rs 290 earlier, maintaining its BUY rating.

JM Financial was particularly impressed by management's newfound confidence. "Eternal once again surprised us positively on Blinkit. This time though, the surprise was more on management commentary than the reported numbers, as it was quite a contrast to the cautious tone post 4QFY25 results," the brokerage noted.

Eternal management outlined a crucial transition plan that caught analysts' attention. "Over the next 2-3 quarters, Eternal is set to gradually make a transition in the quick commerce (QCom) business, from its current marketplace model to an inventory ownership model; this will drive ~100bps margin expansion, albeit requiring net working capital of ~18 days," Emkay analysts explained.

The inventory-led model transition is expected to be transformational, with Nomura raising its long-term contribution margin estimate "by ~60bp to 6.9%" and expecting "~80% of GOV to transition to an inventory-led model."

Management's bold expansion roadmap has analysts excited. "The management sees enough room for store-count expansion in all cities, to 3,000 stores from the 1,544 currently," according to Emkay. This near-doubling of dark store count signals aggressive growth plans ahead.

While Blinkit stole the spotlight, the traditional food delivery segment showed some strain. Food delivery GOV grew 16% YoY, and the management expects FY26 GOV growth at 15-20%. However, JM Financial noted that food delivery adjusted EBITDA margin contracted for the first time (on a sequential basis) after 14 quarters.

Several brokerages outlined their expectations for Blinkit's path to profitability. Nomura expects "Blinkit to break-even at adjusted EBITDA level in 4Q FY26F," while noting that "Blinkit management expects lower absolute growth in adj EBITDA in coming quarters as it continues to rationalize marketing spends."

Nuvama reinforced the positive outlook, stating: "Quick commerce surprised, with NOV soaring 127% YoY—ahead of expectations. Margins shall improve ahead due to the transition to an inventory-led model (1% as % of NOV) coupled with maturation of recently added dark stores and operating leverage."

Not everyone joined the celebration. Macquarie maintained its contrarian stance with an Underperform rating and target of just Rs 150. "Despite yet to be proven steady-state economics and rising competition, the current share price implies $15bn value for Blinkit," the brokerage cautioned. "Remain guarded on both Quick Commerce economics and what's priced in Eternal shares."