Eternal Ltd shares were trading at ₹280.65, down 1.32% from the previous close of ₹284.40, with a market capitalisation of ₹2,70,837.09 crore. Despite the stock's premium valuation, Goldman Sachs has initiated a positive outlook on the company's growth prospects in India's expanding e-commerce sector.

Goldman Sachs Initiates Buy Rating

Goldman Sachs has assigned a 'Buy' rating to Eternal with a target price of ₹375.00, implying a potential upside of approximately 32% from recent closing levels. The global brokerage believes concerns around quick commerce appear overdone, with penetration still near 5% and significant headroom for growth.

The brokerage highlighted Eternal's superior execution capabilities that support faster expansion compared to peers, while margin improvement levers remain intact. A key catalyst identified is the expected EBITDA breakeven for Blinkit by early FY27, which could act as a significant re-rating trigger for the stock.

Strong Financial Performance

Eternal reported robust operating momentum in the September 2025 quarter, demonstrating significant growth across all business segments:

The company's profitability metrics strengthened significantly during the quarter, with adjusted EBITDA margin reaching a record 5.30% of NOV. EBITDA crossed ₹500.00 crore, representing an improvement from ₹451.00 crore in Q1 FY26, supported by strong operating leverage and improving scale.

Market Leadership in Quick Commerce

Eternal's quick commerce arm, Blinkit, maintains a commanding position in India's 10-minute delivery segment with a 45% market share. The competitive landscape shows:

Aggressive Expansion Strategy

The company is accelerating its expansion plans, targeting 2,100 stores by December 2025, above its earlier guidance of 2,000 stores. This upward revision signals continued confidence in demand and the company's ability to scale operations effectively across key cities.

Valuation Concerns

Despite the positive operational metrics, Eternal's valuation appears stretched with a PE ratio of 1,460x, significantly higher than the typical market range of 15-25x. This extreme valuation suggests investors are paying approximately 65 times more than normal market multiples, reflecting overheated expectations and limited margin of safety.

The Indian e-retail food delivery sector, valued at approximately USD 45.00 billion in 2024, is expected to grow at a CAGR of over 20%, potentially reaching close to USD 140.00 billion by 2030, driven by rapid urbanisation and increasing smartphone penetration.

Eternal has witnessed significant institutional activity with a major block trade executed on the National Stock Exchange (NSE). The transaction represents one of the notable large-volume trades in the stock, indicating substantial investor interest.

Block Trade Details

The block trade executed on NSE involved a considerable volume and value, demonstrating significant market activity in Eternal shares.

Market Significance

Block trades represent large-volume transactions that are typically executed outside the regular market mechanism to minimize price impact. These transactions usually involve institutional investors, mutual funds, insurance companies, or other large market participants who need to buy or sell substantial quantities of shares.

The execution price of ₹282.90 per share for this block trade provides insight into the institutional valuation of Eternal shares. Such transactions often occur when there is strategic repositioning by large investors or when institutional funds are rebalancing their portfolios.

Transaction Volume Analysis

The transaction involving approximately 39.05 lakh shares represents a significant portion of trading activity. Block trades of this magnitude typically require careful execution to ensure minimal market disruption while facilitating the transfer of large share quantities between institutional parties.

Such substantial block trades often indicate confidence in the company's fundamentals from institutional investors, as these participants typically conduct thorough due diligence before executing large-value transactions.