Eternal Limited (formerly Zomato) has fallen 30% from its 52-week high of Rs 305 to Rs 210, bringing its market cap down to Rs 1.85 lakh crore. The correction has been driven by broader market weakness and concerns about Blinkit’s aggressive expansion. But with the stock approaching its IPO-era levels adjusted for the name change, fundamental investors are taking notice.
Q3 FY26 Results: Mixed but Improving
- Revenue: Rs 5,600 crore (+48% YoY)
- Adjusted EBITDA: Rs 310 crore (vs Rs 85 crore YoY)
- Food Delivery GOV: Rs 9,800 crore (+22% YoY)
- Blinkit GOV: Rs 5,200 crore (+120% YoY)
- Blinkit Dark Stores: 1,007 (up from 639 a year ago)
The Bull Case
Blinkit is building a moat: Quick commerce is not winner-takes-all, but Blinkit’s first-mover advantage in dark store density is hard to replicate. With 1,000+ stores, the company has better unit economics than competitors. Contribution margin turned positive at 2.8%, and management targets 5%+ by FY28.
Food delivery is a cash cow: Adjusted EBITDA margin of 5.2% and growing. With 25%+ market share in organized food delivery, pricing power is improving.
Going Out + Hyperpure: District (events) and Hyperpure (restaurant supply chain) are high-potential adjacencies contributing Rs 400 crore+ quarterly revenue.
The Bear Case
Blinkit capex is burning cash: Each new dark store costs Rs 50-60 lakh, and the company plans 500 more in FY27. This delays consolidated profitability.
Competition: Swiggy Instamart, Flipkart Minutes, Amazon Fresh, and JioMart are all investing heavily in quick commerce.
Valuation: At 7x FY27E revenue, Eternal isn’t cheap versus global food delivery peers (DoorDash at 5x, Delivery Hero at 1.5x).
Verdict
At Rs 210, Eternal offers a reasonable entry for investors with a 3-year horizon. The company is building India’s most comprehensive food and grocery platform. However, expect volatility and no dividends. Accumulate between Rs 190-215 with a target of Rs 300.