Eternal Q2 Review: Food Delivery Growth Pangs Persist, Says HDFC Securities
Eternal Ltd.’s food delivery segment continues to witness subdued demand, primarily due to softer discretionary spending. However, the company is seeing improvements at the margin. Meanwhile, Blinkit’s growth remains impressive, with 100%+ growth for 10 quarters and most key performance indicators (KPIs) broadly intact.
Q2 Review: Key Highlights
According to HDFC Securities, most positives seem priced in for Eternal, leading the brokerage to largely maintain its adjusted Ebitda estimates for FY27/28. The ‘Reduce’ stance remains, with a target price of Rs 320/share, based on a sum-of-the-parts (SOTP) valuation. This includes 45x Sep-27 EV/Ebitda for food delivery and 1.8x Sep-27 NoV for Blinkit.
Food Delivery Segment: Challenges and Opportunities
The food delivery segment has been facing growth pangs, primarily due to softer discretionary spending. However, the company is seeing improvements at the margin, indicating a potential turnaround. Food delivery trends in India suggest that the market is becoming increasingly competitive, with several players vying for market share.
Blinkit’s Growth Story
Blinkit’s business model has been impressive, with 100%+ growth for 10 quarters. The company’s ability to scale quickly and maintain its KPIs has been a key factor in its success. As the Indian e-commerce market continues to grow, Blinkit is well-positioned to capitalize on this trend.
Investment Implications
For investors, the Q2 review of Eternal Ltd. presents a mixed bag. While the food delivery segment continues to face challenges, Blinkit’s investment potential remains significant. As the company continues to grow and expand its operations, it may be worth considering for investors looking to tap into the Indian e-commerce market.
Conclusion
In conclusion, Eternal Ltd.’s Q2 review reveals a mixed picture, with the food delivery segment facing growth pangs and Blinkit’s impressive growth story. As investors, it is essential to keep a close eye on the company’s progress and consider the potential opportunities and challenges in the Indian stock market. For more information on Indian stock market news and updates, please visit our website.
