Emkay Global Financial Services has reaffirmed its BUY rating on ETERNAL, setting a twelve-month target price of Rs330. The report sheds light on Amazon’s aggressive expansion in India’s quick-commerce (QCom) sector, highlighting the escalating competitive scenario in Mumbai. With 100 new dark stores, Amazon Now is challenging entrenched rivals Blinkit and Swiggy, but faces supply chain and customer loyalty hurdles. ETERNAL, fortified by robust execution, massive cash reserves, and leading unit economics, is positioned to capture market growth. This phase of “land grab” will eventually give way to consolidation, reshaping profitability and sector dynamics. Key financial metrics and valuation levels underpin Emkay’s bullish stance.

Amazon’s Quick Commerce Offensive in Mumbai

Amazon Now, Amazon’s quick commerce business, is scaling up operations in Mumbai following successful launches in Bengaluru and Delhi. While Amazon’s footprint of approximately 100 dark stores remains a fraction of Blinkit’s 1,544 and Swiggy’s 1,062, demand is reportedly exceeding expectations, with monthly orders rising at an impressive 25% pace and Prime subscribers tripling their order frequency after joining Amazon Now. The integration of QCom alongside Pay, Fresh, Bazaar, MX Player, and Medical within the Amazon app demonstrates increased leadership commitment to the Indian rapid delivery landscape.

Competitive Dynamics: Incumbents versus Adjacent Challengers

This “land grab” phase in quick commerce is marked by the entry of adjacent behemoths alongside established names such as Blinkit, Instamart, and Zepto. Amazon joins Flipkart and Reliance in stepping up the competitive heat, but faces the daunting task of building an entirely new supply chain. Incumbents have established significant brand recall, serving as default choices for millions—a major barrier for newcomers. Emkay asserts that existing players are better positioned, not least because of their deep consumer engagement and operational scale. Excessive competition may erode near-term profitability industry-wide, but expanding the addressable market promises lasting benefits.

Blinkit’s Execution and ETERNAL’s Financial Arsenal

Blinkit is outperforming the sector in operational execution, scale, and unit economics, granting it wider EBITDA margins compared to most peers. ETERNAL holds a war chest of Rs188.6 billion in cash, providing ample firepower for marketing and dark store rollouts. Emkay remains bullish, confident that ETERNAL’s incumbency and capital will allow management to navigate fierce competition, retain customer stickiness, and emerge stronger through market consolidation—expected as growth rates decelerate and sub-scale rivals bow out.

Key Price Levels and Target for Investors

Current Market Price: Rs328 | Target Price: Rs330 | Upside: 0.6% - 52-week High: Rs334 - 52-week Low: Rs190 - Shares Outstanding: 9,650.4 million - Market Capitalization: Rs3,166 billion (USD 35.8 billion)
ETERNAL’s share price has surged by 20.7% over the last 12 months, outperforming the Nifty index by 20.3%. Average daily traded value stands at Rs14,816.6 million over three months.

Financial Performance Snapshot

Valuation Multiples and Shareholding Structure

ETERNAL is currently trading at a P/E of 271.4x for FY26, but with strong revenue and EPS growth forecasts—the ratio is set to halve by FY28. EV/EBITDA is projected to improve, some normalization seen as margins scale. With Free Float at 71.7%, FPI/MFs hold substantial stakes (42.3/26.6%), indicating strong institutional confidence.

Historical Recommendation and Price Trajectory

ETERNAL has enjoyed a steady stream of BUY ratings since at least October 2024, with target prices rising in tandem with operational momentum. Since the beginning of 2024, the stock has consistently received upward revisions, suggesting ongoing sectoral strength and management credibility.

Bottomline: Investment Implications

Emkay’s bullish call on ETERNAL rests on strong fundamentals, strategic deployment of capital, and proven operational excellence in the QCom ecosystem. While the current upside to the target price is modest, the risk-reward profile favors longer-term investors willing to ride out intense competitive churn. The research house expects profitability to improve as market growth matures, with sector consolidation favoring scale players—particularly Blinkit and ETERNAL. The company’s robust balance sheet, high liquidity, and low leverage further protect downside risks. For investors seeking exposure to the rapid evolution of Indian quick-commerce, ETERNAL stands out as a compelling choice.