Eternal shares: CLSA sets highest target post Q2 results; Macquarie has lowest

Citi and Bernstein have targets of Rs 385 and Rs 350, respectively on the Eternal stock. The upside targets suggests up to 64 per cent upside potential, with downside targets by Macquarie and Ambit Capital suggested up to 28 per cent potential downside.

Nirmal Bang Institutional Equities said both segments performed well in Q2 as food delivery
(FD) segment compounded at a steady 5.5 per cent margin while Blinkit booked a third consecutive quarter of positive adjusted Ebitda and re-accelerated net order value (NOV), with quick commerce (QC) competition turning predictable.

The key driver, it said, is the upward reset of Blinkit's steady-state model alongside the management's willingness to guide to the top of the 6 per cent adjusted Ebitda band and to re-accelerate store-adds from Q3 without margin dilution, which is the biggest incremental driver.

"The quarter reinforced a growth-led strategy at both Blinkit and food delivery, with improving visibility on quick-commerce expansion economics. Blinkit’s planned store acceleration, expected NOV growth pickup from Q3FY27, and continued productivity headroom support the medium-term growth outlook, while smaller-city expansion appears increasingly attractive on paybacks and food delivery prioritising absolute profit growth over margin maximisation," it said.

The brokerage suggested 'Buy' and a target of Rs 385 on Eternal.

MOFSL said Eternal's FD business is stable, while Blinkit continued to offer a long runway to participate in the structural shift in retail, grocery, and e-commerce.

"We trim our FY27 EPS estimate, driven by a substantially higher tax rate in Q2, as all tax shields at the standalone parent level have been exhausted in carried forward losses in FY27 and standalone entity profits will now be taxed at the full rate. While competitive intensity remains elevated, competition is becoming more predictable, and the business model appears established," MOFSL said. It suggested a target of Rs 420 on the stock.

Nuvama Institutional Equities upped its target on the stock to Rs 420 from Rs 360. Ambit Capital, meanwhile, suggested 'Sell' and a target of Rs 245 on the stock.