JM Financial retains 'Buy' on Eternal as Blinkit growth moderates in Q3FY26

According to JM Financial, Blinkit's net order value (NOV) growth is likely to slow to around 13 per cent Q-o-Q in Q3FY26, compared with 25 per cent and 27 per cent growth in Q1 & Q2, respectively.

Domestic brokerage JM Financial has reiterated its ‘Buy’ rating on Eternal, even as it expects a near-term moderation in Blinkit’s sequential growth during the third quarter of FY26 (Q3FY26) due to heightened competition and an unfavourable base. 

 

The brokerage believes these pressures are transitory and do not alter its medium-to-long-term investment thesis, given Blinkit’s improving profitability trajectory and Eternal’s strong positioning across its consumer businesses.

 

According to JM Financial, Blinkit’s net order value (NOV) growth is likely to slow to around 13 per cent quarter-on-quarter (Q-o-Q) in Q3FY26, compared with 25 per cent and 27 per cent growth in Q1 and Q2, respectively. This moderation is largely attributed to the early festive season boost seen in Q2, which created a tough comparison base, as well as rising competitive intensity in the quick commerce segment. Aggressive strategies by multiple players, including reduced minimum order value thresholds and zero or negligible delivery and service fees, are expected to weigh on near-term growth momentum.

 

 

Despite this sequential slowdown, JM Financial analysts highlighted that Blinkit’s year-on-year (Y-o-Y) growth remains robust, with NOV expected to rise over 120 per cent Y-o-Y in Q3FY26, comfortably ahead of management’s guidance of 100 per cent+. For FY27, the brokerage has pencilled in 90 per cent Y-o-Y growth in Blinkit’s NOV, underscoring its confidence in the platform’s structural growth drivers.

 

The brokerage also noted that competitive aggression in quick commerce has intensified in recent months, with newer entrants such as Minutes, Now and JioMart rapidly expanding store coverage and deploying heavy promotional tactics to gain scale. However, JM Financial believes such strategies are unlikely to be sustainable over an extended period due to mounting losses. 

 

Contrastingly, Blinkit’s relatively stronger unit economics and more efficient supply chain position it better to navigate this phase without materially compromising either growth or profitability. The report pointed out that Blinkit’s adjusted Ebitda loss per order stood at ₹7 in Q2FY26, compared with ₹84 for Instamart, highlighting its structural cost advantage.  JM Financial stressed that the quality of Blinkit’s growth remains superior to that of its peers. The platform continues to benefit from a large and engaged transacting user base, with no meaningful dilution in average order values or ordering frequency. This stability in user behaviour indicates resilient demand, even amid competitive pressures. Lower per-order losses further reinforce Blinkit’s advantage in unit economics, according to the brokerage.

 

On profitability, JM Financial expects Blinkit’s adjusted Ebitda losses to narrow sequentially over the coming quarters. The improvement is expected to be driven by take-rate expansion, operating leverage from the scaling up of dark stores and mother hubs, and margin benefits associated with its inventory-led business model. The brokerage forecasts an adjusted Ebitda margin of -0.9 per cent in Q3FY26, compared with -1.8 per cent and -1.3 per cent in Q1 and Q2, respectively. Blinkit is expected to reach adjusted Ebitda break-even around Q1FY27, assuming competitive intensity remains within current levels.

 

Beyond quick commerce, JM Financial also expects improving trends in food delivery, with NOV growth projected at 16 per cent Y-o-Y, up from 13-14 per cent in the first half of FY26. Food delivery margins are expected to remain stable at 5.3 per cent of NOV, in line with Q2FY26 levels.

 

That said, JM Financial reiterated that Eternal remains its preferred pick, citing market leadership, superior unit economics across its B2C businesses and a healthy balance sheet. 

 

The brokerage has maintained its ‘Buy’ recommendation with a revised December 2026 target price of ₹400, based on 75x NTM EPS, compared with 80x earlier, reflecting slightly tempered near-term growth expectations while retaining confidence in the long-term outlook.

 

Disclaimer: The view/outlook has been suggested by JM Financial. Views expressed are their own.