Never a dull moment! Why Jefferies raised Eternal’s target price after Q2 earnings

ETMarkets.com

Jefferies raised its target price on Eternal to Rs 430 from Rs 415, implying around 38% upside. 

Jefferies increased target price to Rs 430 apiece from Rs 415 apiece, with the latest target price implying around 38% upside potential from the stock’s previous closing price of Rs 312.35 apiece on NSE.

Also read | Eternal’s Q2 revenue jumps 78% on quick commerce growth; profit misses estimates

Jefferies on Blinkit

For Blinkit, Jeffeires noted that the company’s EBITDA improved to Rs 1.8 billion, well ahead of its estimate. Eternal’s management raised the store target by 15% to over 3,500 by March 2027 and 5,000 by March 2028. This clearly signals the management’s optimism. Bulk of the adds would be in smaller cities, where economics remain encouraging despite lower AOVs. Visibility on competition has improved, and management appeared more confident, Jefferies said.

Jefferies expects NOV growth (YoY) to pick up from Q3 FY27 as store additions accelerate, with no near-term margin dilution likely as improving economics in mature stores/cities offset new store drag. It estimates margins over the medium to long term should continue to expand.

Jefferies on food delivery

Jefferies noted that Eterna’s food delivery segment saw growth being driven by both user additions and higher order frequency, with MTUs up 16% YoY to 28 million. Competitive intensity was higher than prior quarters, partly driven by Zomato’s own growth investments, with higher spend on acquisition and frequency yielding good outcomes.

The international brokerage highlighted that Eternal’s management is prioritising absolute adjusted EBITDA growth over margin expansion, with margins expected to remain range-bound over next 1-2 years, while confident on 20%+ growth over the near to medium term.

Also read | Eternal shares jump 2% after strong Q2 show, brokerages see up to 34% upside

Jefferies on dark.ai

Beyond the second quarter earnings, the key excitement and monitorable is the AI platform (dark.ai), Jefferies said. “Not much is known today, and the outcome could be binary, but we like the experimental DNA,” the international brokerage added.

Eternal unveiled dark.ai, a privacy-focused AI application built on open-source models. Through this, the company uses fine-tuned frontier open-weight models that run on its own infra. 'End-to-end encryption' is the key promise, that is, no one can read user conversations. The company’s management highlighted it as a 'zero to one' bet. Costs are currently not meaningful, but if scaled, investment would mainly be in hardware and compute.

Eternal share price

Eternal shares rose 2% on Thursday after the company reported a 92% year-on-year (YoY) jump in net profit to Rs 125 crore in the second quarter of FY27 (Q2FY27), compared with Rs 65 crore in the corresponding quarter of the previous fiscal year. The company's revenue from operations rose 77.6% YoY to Rs 24,138 crore in the quarter under review, from Rs 13,590 crore reported in Q2 FY26.

The shares have fallen around 3% in a week and more than 8% in a month. The stock is overall up over 10% in 2026 so far. In the longer term, the stock has delivered multibagger returns of over 176% in three years and 127% in five years.

Also read | Eternal’s Deepinder Goyal teases new AI product, Dark.ai