ICICI Securities has reiterated a BUY rating on Eternal, setting a target price of Rs 360, implying a compelling upside of nearly 42% from the current market price of Rs 253. The brokerage underscores the company’s ability to deliver sustainable and profitable growth, even amid macroeconomic volatility and seasonal headwinds. Strong execution in quick commerce, improving food delivery metrics, and a clear roadmap toward long-term profitability form the backbone of this bullish stance.

Executive Snapshot: Growth Engine Firing on Multiple Cylinders

Eternal has delivered a resilient performance in Q4FY26, driven by robust expansion in quick commerce and steady recovery in food delivery demand. The company reported strong revenue acceleration alongside margin improvement, beating consensus estimates. Notably, quick commerce has emerged as a dominant growth lever, surpassing food delivery in user share for the first time. Management’s long-term guidance remains ambitious, with expectations of exponential growth in order volumes and a clear pathway toward significant EBITDA expansion. The structural tailwinds—rising urban demand, improved affordability, and geographic expansion—position Eternal as a high-growth digital consumption play.

Q4FY26 Financial Performance: Strong Beat Across Metrics

Revenue momentum remains robust: Eternal reported revenue of Rs 172.9bn, registering a 196.5% YoY surge and a 6% sequential uptick. Adjusted revenue stood at Rs 176.8bn, reflecting continued demand strength.

Profitability improves meaningfully: EBITDA came in at Rs 4.9bn, up 575% YoY, with margins expanding to 2.8%. Adjusted EBITDA exceeded estimates, reaching Rs 4.3bn.

Bottom-line acceleration: PAT rose sharply to Rs 1.7bn, marking a 346% YoY increase, signaling improving operating leverage.

Segment Analysis: Diversified Growth Drivers

1. Food Delivery: Gradual but Steady Recovery
Food delivery continues to show resilience, with NOV growth at 18.8% YoY. The segment benefited from improved affordability strategies such as reduced minimum order value and curated offerings.

Revenue: Rs 31.3bn (+29.7% YoY)
Contribution margin: 10.2%
EBITDA margin: 5.5%
Monthly transacting users: 25.4mn (+21.5% YoY)

The focus on expanding the addressable market is paying off, even as average order values slightly decline.

2. Quick Commerce (Blinkit): The Breakout Performer

Quick commerce has emerged as the primary growth engine, delivering exceptional scale and improving profitability.

NOV: Rs 143.9bn (+95.4% YoY)
Revenue: Rs 132.3bn (+126% YoY)
EBITDA margin: Positive at 0.3% (vs negative last year)

Key drivers:

Rapid store expansion (216 net additions in a single quarter)
Rising user adoption (MTU growth ~98% YoY)
Improved contribution margins

Management expects ~60% CAGR in NOV over the next three years, supported by expansion into new cities and improved demand density.

3. Going-Out Business: Improving Margins

The going-out vertical delivered steady growth with improving efficiency:

NOV: Rs 27.4bn (+46.5% YoY)
EBITDA margin: Improved to -3%

The segment remains on track to achieve long-term profitability with targeted scale expansion.

4. Hyperpure: Transitional Phase

Hyperpure witnessed a revenue decline but improved profitability:

Revenue: Rs 9.8bn (-46.8% YoY)
EBITDA margin: Turned positive at 0.5%

This segment is undergoing recalibration with a focus on efficiency.

Key Financial Projections

Insight: Earnings are projected to witness a multi-fold expansion, driven by operating leverage and scale efficiencies.

Strategic Outlook: Clear Path to USD 1bn EBITDA

Management’s long-term vision is aggressive yet credible:

Quick commerce EBITDA margins expected at 5–6% steady state
Store network to expand to 3,000+ locations by FY27
Consolidated adjusted EBITDA targeted at USD 1bn by FY29

Additionally, favorable macro triggers such as inflation-driven pricing power could further accelerate growth.

Operational Strengths Driving Competitive Advantage

Demand-side innovation: Lower entry barriers and targeted customer activation have expanded the user base.

Superior unit economics: Despite lower ticket sizes, profitability remains intact due to scale efficiencies.

Advertising monetization: Quick commerce generates higher ad revenue as a percentage of order value, enhancing margins.

Working capital discipline: Stable working capital cycle (~18 days) supports cash flow strength.

Valuation and Investment Case

ICICI Securities values Eternal using a three-stage DCF model, maintaining its target price at Rs 360.

Valuation multiples:

FY27E P/E: 92.4x
FY28E P/E: 44.6x
EV/EBITDA expected to decline sharply as earnings scale up

While current valuations appear elevated, the brokerage justifies the premium based on high growth visibility and improving profitability trajectory.

Risks to Monitor

Macro sensitivity: A slowdown in discretionary spending could impact demand.

Competitive intensity: Aggressive expansion by rivals may pressure margins.

Execution risk: Scaling quick commerce while maintaining profitability remains critical.

Investment Levels and Strategy

Current Price: Rs 253
Target Price: Rs 360
Upside Potential: ~42%

Recommended Strategy:

Accumulate on dips for long-term growth exposure
Ideal for investors seeking high-growth digital consumption plays
Maintain a medium-to-long-term horizon to capture full value

Bottomline: A Structural Growth Story in Motion

Eternal is transitioning from a high-growth, cash-burning entity into a scaled, profitable digital ecosystem. With quick commerce firing on all cylinders, food delivery stabilizing, and clear visibility on margin expansion, the company stands at an inflection point. ICICI Securities’ bullish stance reflects confidence in Eternal’s ability to compound growth while delivering sustainable profitability—making it a compelling play in India’s evolving consumption landscape.