ICICI Securities issued a buy rating for Eternal with a target price of Rs 425. The firm expects quick commerce stores to reach 5,000 by FY28. Management said, "The lines between e-commerce and QC are blurring." Strong growth in food delivery and store expansion plans support this positive market outlook.
ICICI Securities research report on Eternal The upgrade in quick commerce (QC) store guidance to ~5,000 (nos.) by FY28 is indicative of management's belief that the lines between e-commerce and QC are blurring. Most of the stores will likely be added in smaller cities, where store payback and margins are tracking well. We think ad revenues (as a % of NOV) may rise as Blinkit focuses on assortment expansion to capture more usage occasions. This in our view, gives management the confidence to pursue faster growth without worrying about EBITDA margin dilution. Food delivery (FD) growth continued to accelerate in Q2FY27. Outlook for both QC and FD is better in H2FY27 given the delayed festive season (QC) and management reinvesting surplus cash flows (FD). We are constructive on 'Dark.AI' given Eternal's strong capital deployment track record. Maintain BUY. Outlook We maintain BUY with a three-stage DCF-based unchanged target price of INR 425. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Eternal - 2210026 - icici