Kotak Sec's stock picks: Vedanta on metal upcycle; Eternal on Blinkit scale

Stocks to buy today: Vedanta seen benefiting from base metals rally and demerger-led value unlock; Eternal (Zomato) to gain from Blinkit scale-up and margin expansion

Stocks to Buy - Shrikant Chouhan recommendations, January 20, 2026

Vedanta: BUY

 

CMP - ₹675

 

Share price target – ₹780

 

Resistance – ₹700/745

 

Support – ₹670/650

 

Vedanta share price is best placed to ride the ongoing rally in base and precious metals, with ~85 per cent of FY27E Ebitda being derived from aluminum (~50 per cent), zinc (~20 per cent) and silver (15 per cent). Capacity growth across aluminum, zinc, and power divisions over FY2027–28E is an additional earnings driver. The proposed demerger into five entities is expected to start in Q4FY26E and conclude in phases by Q1FY27E. We expect a value unlock from higher multiples in the aluminum and power divisions. Reflecting higher commodity price estimates.

 

 

Price escalations due to supply disruptions in copper and a supportive macro environment weakening US dollar and US Fed rate cuts have elevated the entire base and precious metals complex. Aluminum, zinc and silver together account for ~85 per cent of attributable FY2027E Ebitda. With sensitivity to these key metals, Vedanta stock remains best positioned to capture the upcycle in base and precious metals.

 

Aluminum prices, at $3,200/tonne, are up 9 per cent in CY-2026 and 26 per cent year-on-year (Y-o-Y), driven by bullish sentiment across industrial metals, supportive macro conditions and supply concerns, mainly in Africa. We estimate a structural deficit over the medium term, supported by strong secular demand and insufficient supply growth. Global aluminum demand grew 2.3 per cent Y-o-Y in CY-2025 and is expected to grow 1.6 per cent/1.8 per cent in CY2026/27E. Production growth of 1.8 per cent/1.4 per cent in CY2026/27E implies a deficit market over CY2026–28E. We raise our LME aluminum price forecast to $2,850/tonne for FY2027/28E versus spot at US$3,200/tonnee.

 

That apart, the demerger process is on track with remaining regulatory approvals expected by Q1FY27E. We revise consolidated Ebitda estimate by 1.3 per cent/8.7 per cent/6.9 per cent for FY2026E/27E/28E, driven by higher aluminum and silver prices. We view the risk-reward as attractive, given strong earnings growth, led by expansions, ~5 per cent dividend yield and manageable parent leverage at the current 6X EV/Ebitda (attributable) FY2027E. 

Eternal – BUY

 

CMP – ₹281

 

Share price target– ₹400

 

Resistance – ₹300/315

 

Support – ₹270/260

 

Eternal (Zomato) is one of India's largest food services platforms that connects customers, restaurant partners, and delivery partners. Its offerings include dining-out services, loyalty programs, quick-commerce service (through subsidiary Blinkit), and others.

 

We expect Zomato to report food delivery gross order value (GOV) of ₹11,700 crore, reflecting a growth of 18 per cent Y-o-Y and 2.3 per cent Q-o-Q in Q3FY26. Net order value (NOV) is expected to grow 15 per cent Y-o-Y and 3.0 per cent Q-o-Q in Q3. This is broadly in-line with the 18-per cent GOV growth reported by the company in Q2 and marginally lower than the 19 per cent GOV growth we expect for Swiggy's food delivery business during the quarter. We do not anticipate any major take-rate increase during the quarter and, therefore, forecast segment revenue growth of 20 per cent Y-o-Y.

 

Contribution margin (CM) for food delivery is expected at 8.7 per cent of GOV in Q3FY26, up 10 bps Q-o-Q and 20 bps Y-o-Y. The Y-o-Y expansion is likely to be driven by higher restaurant take rates, increased platform fees, and improved advertising income. Sequential improvement of 10 bps is expected mainly due to higher platform fees, translating into a 10-bps expansion in Ebitda margin.

 

For Blinkit, we expect strong NOV growth of 123 per cent Y-o-Y and 15 per cent Q-o-Q, supported by aggressive store additions and improving throughput of existing stores. We forecast a period-ending store count of 2,100, implying net addition of 284 stores in Q3. NOV growth is partially impacted by a 3–4 per cent effect from GST rate revisions implemented in September 2025. Blinkit's CM is expected at 4.9 per cent of NOV, a 30 bps sequential improvement driven by the scaling up of older stores. Ebitda loss is likely to narrow to ₹140 crore from ₹160 crore in Q2FY26.

 

Management commentary on competitive intensity, discounting trends, and near-term profitability will be key monitorables. Blinkit revenues from Q2 onward include the shift to the 1P model, making Y-o-Y and Q-o-Q comparisons less meaningful. Hyperpure revenues may decline annually due to reduced buy-and-sell linked to Blinkit.

 

We believe Blinkit's profitability can expand with higher ad monetization and an increasing mix of mature stores. Despite high competitive intensity, Eternal remains best positioned to generate sustainable margins. We retain 'BUY' with an unchanged SoTP-based share price target of ₹400.

 

  ================  Disclaimer: Shrikant Chouhan is the head of equity research at Kotak Securities. Views expressed are his own.