Eternal Ltd - Stock Market Research

Eternal Ltd
Outlook

Food Delivery Adj. EBITDA margin contracted for the first time in 14 quarters (sequential basis).
Unexpected rise in investments in ‘Bistro’ (operated by Blinkit).

243 stores added in the quarter; total now at 1,544.
On track to reach 2,000-store target.
Quarterly losses have peaked; profitability outlook improves as more stores mature.
Rapid QC rollout showing execution strength, despite high competition.

NOV grew 13% YoY, impacted by weak consumer sentiment.
Growth expected to recover: Management guides +15% growth in FY26, +20% in FY27.
Short-term demand weakness likely to continue; no quick fix.

Competitive intensity remains a key monitorable.

Near-term margin pressure from rising competition, store expansion, and soft food delivery demand.

Long-term model resilient, with pricing power (platform fees on all users) and diversified verticals.

Medium term: potential to become a cash-generating business.

Recommendation by Broking Firms (Updated on 25th July 2025)

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Recent Concall Highlight

Wage revisions to begin in Q2FY26; ESOP and employee cost guidance remains unchanged.
Focus shifting to optimizing delivery partner login hours, improving efficiency and earnings.

Store expansion to 3,000 stores will be gradual, based on category trends.
Store profitability is age-driven, not city-tier dependent; smaller cities need more capital.
Moving toward a 1P inventory model to enhance fill rates and operational efficiency.
Gross margins to benefit from fixed cost leverage, though marketing spend remains steady.

Top-20 cities drive Blinkit’s growth; overlap with food delivery is limited.
Blinkit maintains leadership position, avoids competitor-led model experiments.

Food delivery revenue up 16.4% YoY to ₹22.6Bn; Net Order Value (NOV) up 13.1% YoY to ₹90Bn.
Discounts accounted for 16.7% of GOV.
Management expects NOV growth of 15–20% in FY26, returning to 20%+ in FY27.