Eternal hits 52-wk high as Goldman Sachs lifts target price, retains 'Buy'

Goldman Sachs says Blinkit's store count could double in the next two to three years, a dynamic which is not being fully reflected in Zomato's current share price

Global brokerage Goldman Sachs has raised the target price on Eternal, the parent company of food delivery giant, while maintaining a 'Buy' rating on the stock. The brokerage said Blinkit's growth momentum remains strong and its FY27 net order value (NOV) estimates are now tracking 80 per cent and 260 per cent higher than what it had expected 12 months and 24 months ago. 

 

According to Goldman Sachs, Blinkit's store count could double in the next two to three years, driving significant market share expansion, a dynamic which is not being fully reflected in Zomato's current share price. 

 

At 01:50 PM, shares of Eternal were trading at ₹336.9, down 0.3 per cent from the previous day's close of 337.85 on the NSE. In comparison, the benchmark NSE Nifty50 index was trading 0.34 per cent lower at ₹24,336 levels. The stock remained rangebound after hitting a 52-week high, dipping to a day’s low of ₹334.55. In the last two sessions, the stock has gained around 3.6 per cent. The market capitalisation of the company stood at ₹3.2 trillion.  

 

Additionally, Blinkit's margins are expected to improve by 240 basis points (bps) in the next two quarters, on the back of a stable competitive environment, slower store expansion, and the shift to a 1P model. The segment is likely to reach Ebitda break-even by December 2025, which could be a key trigger for the stock. 

 

It also expects a year-on-year (Y-o-Y) acceleration in NOV growth for both quick commerce and food delivery segments of Zomato in Q2FY26, with further upside risks to its estimates if such momentum were to sustain until the end of the quarter. 

 

In its base case, Goldman Sachs has incorporated Blinkit’s transition to 1P (inventory ownership), which does not impact like-for-like NOV estimates but leads to meaningful increases in revenue estimates. 

 

"We do not raise our margin estimates and rather assume reinvestment in growth, translating into higher NOV estimates (by up to 8 per cent). Additionally, we are further raising our food delivery NOV estimates by up to 3 per cent on the back of continued strength in food delivery MTUs, and expect Zomato’s food delivery NOV growth to approach 20% YoY by March 2026," Goldman Sachs said. 

 

The brokerage has raised its food delivery NOV estimates for Zomato by up to 3 per cent, citing continued strength in monthly transacting users (MTUs). It expects NOV growth in the food delivery segment to reach around 20 per cent year-on-year by March 2026. 

 

While near-term EPS (earnings per share) estimates have been revised slightly lower, projections for the outer years remain strong. Goldman has raised its 12-month target price for Zomato to ₹360 (from ₹340 earlier) and reiterated a ‘Buy’ rating, implying a 10 per cent potential upside. Notably, Blinkit now accounts for nearly 70 per cent of the firm’s sum-of-the-parts valuation, it added. 

 

In its bull case scenario, Goldman Sachs expects a potential 44 per cent upside for Zomato over the next 12 months, compared to 10 per cent in the base case. “In our bull case, we assume food delivery growth and Going-out scale in line with management guidance,” the brokerage said. 

 

The brokerage also models a higher total addressable market (TAM) for quick commerce, with Blinkit capturing a larger share. It estimates FY30 EPS to be about 30 per cent higher than in the base case, valuing quick commerce at ₹336 per share—roughly in line with Zomato’s current market price.

 

In its bear-case scenario, Goldman Sachs sees a 31 per cent downside for Zomato, valuing the stock at ₹225 per share. “We assume lower quick commerce penetration, reduced market share for Blinkit, and margin pressures across segments,” the brokerage said. Compared to the base case, the implied value for food delivery and other segments is also lower.