Eternal shares surged approximately 3% to ₹292.95 on BSE following a strong endorsement from Goldman Sachs, which dismissed the excessive bearish sentiment surrounding the stock. The rally came after the global brokerage maintained its Buy rating and set a revised 12-month target price of ₹375, implying 33% upside potential from current levels. This positive outlook provided much-needed support to the stock, which had declined 17% over the past three months.

Goldman Sachs Maintains Bullish Stance

Goldman Sachs expressed disagreement with the extent of bearishness being priced into Eternal's stock, citing concerns over near-term quick-commerce growth slowdown and competitive pressures on Blinkit's margins as key factors behind the recent correction. The brokerage emphasized that Blinkit's implied EV/EBITDA on normalized margins for FY30E at 14x remains at the lower end of India's internet peer group, despite demonstrating a significantly superior growth profile.

Blinkit's Market Dominance

Goldman Sachs highlighted Blinkit's strong competitive position in India's quick-commerce industry, estimating the platform currently holds 40-45% market share by net order value (NOV). The brokerage expects this market share to remain broadly stable through FY30E, despite intensifying competition from multiple players including Swiggy, Zepto, Jiomart, BigBasket, Amazon, and Flipkart.

The analysis suggests a multi-player market structure with Blinkit maintaining its leadership position alongside a couple of players holding 15-20% market share each, and additional sub-scale competitors. Notably, Goldman expects Blinkit to capture more than 100% share of the quick-commerce industry profit pool (EBITDA) starting FY27E for at least the following 2-3 years.

Q3 Performance Expectations

Nuvama Institutional Equities positioned Eternal among the leaders in revenue growth for Q3 within its internet coverage universe. The brokerage projects strong momentum across its internet coverage for Q3FY26E, with specific financial projections showing mixed results.

While revenue growth appears robust with 187% year-on-year increase and 14% sequential growth, the adjusted PAT is expected to face significant pressure with an 84% year-on-year decline and 86% sequential drop.

Market Outlook

The endorsement from Goldman Sachs comes at a crucial time for Eternal, as investors had grown increasingly concerned about competitive dynamics in the quick-commerce space and their potential impact on profitability. The brokerage's analysis suggests that current market concerns may be overblown, particularly given Blinkit's strong market position and growth trajectory. Goldman's conservative growth estimates compared to management guidance provide additional confidence in their projections, with significant upside potential in bullish scenarios.

Zomato CEO Deepinder Goyal has revealed his controversial management philosophy during a recent podcast appearance, explaining his approach to handling high-potential employees and addressing the departure of several company co-founders. Speaking on Raj Shamani's 'Figuring Out' podcast, Goyal discussed what he terms a 'rock bottom' strategy that involves deliberately challenging employees he believes have exceptional potential.

The 'Rock Bottom' Management Strategy

Goyal described his unconventional approach to employee development, stating that he "consciously hurts" individuals with significant potential. According to the CEO, this strategy involves deliberately impacting employees' self-confidence to help them overcome internal barriers that may be limiting their performance.

Goyal emphasized that he only applies this approach to employees he believes have exceptional capabilities, not those he considers to have limited potential. "I do this with people who have insane potential, not with those who I think do not have potential. They have insane potential but something in their head is coming in their way, that's when I would make them hit rock bottom," he explained.

Executive Departures and Organizational Priorities

The discussion addressed the departure of several high-profile executives from Zomato, including co-founders and senior leaders such as Pankaj Chaddah, Gaurav Gupta, Mohit Gupta, and Gunjan Patidar. Goyal clarified that these departures weren't related to the individuals' capabilities or founder status.

"Everybody has their energy cycle. Life happens, priorities change... But the organisation's priority cannot change for a person," Goyal stated. He emphasized that the departed co-founders were "really good and had that mindset," but other factors influenced their decisions to leave.

Management Challenges and Admissions

Goyal acknowledged that some exit conversations could have been handled more gracefully, admitting to "losing his cool" in certain situations. He recounted a specific incident involving a senior product leader who publicly dismissed his ideas after privately agreeing in meetings, describing the behavior as dishonest.

Despite these challenging departures, Goyal highlighted the company's ability to retain talent long-term, noting that "more than 100 people have left and come back" throughout Zomato's history.

Workforce Management Statistics

The CEO also shared operational insights about Zomato's delivery workforce management:

These figures provide insight into the scale of workforce turnover and management challenges faced by the food delivery platform.

Leadership Philosophy and Organizational Culture

Goyal's revelations offer a glimpse into Zomato's internal culture and his leadership approach. While acknowledging the risks of his 'rock bottom' strategy, he maintains that it serves as an act of care for employees with untapped potential. The CEO's candid discussion reflects his belief in pushing individuals beyond their comfort zones to achieve breakthrough performance, despite the emotional toll it may take on both the employees and himself.