Motilal Oswal's research report onEternal
In this note, we analyze three of Eternal's businesses: the recovering food delivery (FD) business, the quick commerce business, which continues to scale despite intensifying competition, and the nascent going-out business (District), whose potential we explore. The FD business, which had witnessed a slowdown, has now accelerated for the third consecutive quarter. The improvement is being driven by targeted activation of budget-conscious customers and curated affordable meal offerings (e.g. meals under INR250). While NAOV has moderated, higher order frequency and new customer additions are driving volume growth. We continue to view FD as a stable duopoly and expect growth to remain in the range of ~18-20% over the medium term. We expect GOV growth of 21.5% YoY in 1QFY27E and EBITDA margin of 5.0%.
Our TP is based on SOTP, valuing Food Delivery at 35x FY28E EV/EBITDA and Blinkit using a DCF. Our TP of INR380 implies a 34% upside from the current level. We reiterate our BUY rating on the stock.
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