Anand Rathi Maintains Buy Recommendation for Eternal with Target Price of Rs 400

Eternal Reports Strong Q4FY26 Performance

Eternal has reported a steady performance in Q4FY26, with its B2C NOV growing by approximately 54% year over year. This growth was largely driven by a significant 95% year-over-year increase in Blinkit, which also registered a quarterly growth of 8.2%. Additionally, the company's Food Delivery (FD) segment saw a strong 18.8% year-over-year growth, surpassing the expectation of 16-18%.

On the margin front, Eternal's FD adjusted EBITDA margin improved to 5.5% of its NOV from 5.2% in Q4FY25. In contrast, the company's QC adjusted EBITDA improved to Rs370 million (0.3% of NOV) in Q4FY26, up from Rs40 million in Q3FY26. Furthermore, District narrowed its loss to Rs810 million from Rs1.2 billion in Q3FY26.

Looking ahead, the company expects Q1FY27 to be significantly stronger sequentially for QC, as Q4 is typically the weakest quarter. Eternal's management aims to double its NOV to approximately $20 billion by FY28 and take its adjusted EBITDA to approximately $1 billion by FY29, up from $156 million in FY26.

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Recommendation

We maintain our BUY rating on the stock with an unrevised target price of Rs400, based on the following assumptions:

These assumptions reflect our confidence in Eternal's ability to handle the competitive landscape, thanks to its clear scale advantage, particularly in Blinkit, and strong customer retention without relying on heavy discounts.

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