Investors Shower Love on Eternal as Blinkit Grows Bigger Than Zomato, Stock Hits Record High

The poster child of India’s new age companies—Zomato parent, Eternal has been drawing split views from brokerages. While they may divided on Eternal, but they’re united on one point, their love for Blinkit and its strong growth prospects.

Investors on Dalal Street also share a similar sentiment as shares of Eternal surged 13% to hit a record high of ₹311.25 on the NSE. The surge in Eternal's shares also bolstered sentiment for InfoEdge, which holds a 13% stake in the company, lifting the stock over 4% higher.

On one side, global investment firm Jefferies has upgraded the stock to a ‘buy’ and lifted its target price from ₹350 to ₹400, marking a potential upside of nearly 45% from the current market price.

Their optimism is rooted in the improving margin outlook, a reduction in competitive pressure, and promising management commentary despite a mixed Q1 performance. Moreover, analysts at Jefferies also believe the temporary slowdown in food delivery growth is offset by signs of a margin recovery and strategic discipline.

Adding to the cheer, Nuvama Institutional Equities also held steady with its ‘buy’ rating even as it boosted the target price for Eternal’s stock by over 10% to ₹320.

While Nuvama does believe that while Eternal’s Q1FY26 Ebitda margin of 1.6% fell short of Street expectations, the topline growth tells a different story, revenues surged 70.4% year-on-year to ₹7,170 crore, comfortably beating estimates. Blinkit’s NOV (gross order value) grew a staggering 127% on year, and the firm’s transition to an inventory-led model is expected to further shore up margins.

“Zomato has shown stellar growth in the last few years driven by low penetration,” Nuvama noted. “We expect strong growth over the next few years as well, driven by order frequency and increase in customer base.”

Nomura is also warming up to Blinkit’s profitability prospects, thanks to its planned shift to an inventory-led model over the next two to three quarters.

Now classified as an Indian-owned and controlled company (IOCC), Blinkit’s transition is expected to boost margins by roughly 100 basis points. Nomura estimates that around 80% of Blinkit’s gross order value will shift to this model, prompting an upward revision in its long-term contribution margin forecast to 6.9%.

The brokerage now expects Blinkit to break even at the adjusted Ebitda level by Q4 FY26. However, it flagged rising competitive intensity as a key risk to the margin story. Still, Nomura raised its target price for Eternal by over 7% to ₹300, with a ‘buy’ call, highlighting that the company is no longer burning cash at the Ebitda level.

But not everyone’s impressed as others remain wary of margin pressure and stiff competition in the quarters ahead.

Macquarie, that already holds a cautious take on Indian tech stocks, is holding on to its bearish stance. The brokerage has maintained its ‘underperform’ rating with a deep-cut target price of ₹150, anticipating a downside of over 45%.

It acknowledges Blinkit’s explosive growth and moderation in losses but believes intense competition will keep profitability elusive for longer. Macquarie is also wary of downside risks to Zomato’s long-term guidance of 18% CAGR for GOV (Gross Order Value) between FY25 and FY28.

At the heart of Macquarie’s caution lies a dilemma for investors, is Blinkit strong enough to anchor Eternal’s future growth and sustain its rich valuation despite intense market competition? For now, however, the Street seems open to bet on the Blinkit story.