Synopsis: The company’s extraordinary valuation stems from explosive quick-commerce growth, rising margins, and strong market leadership, despite a sharp decline in profits. Rapid expansion, higher order volumes, and improving efficiency fuel optimism, but sustainability remains uncertain. The outlook ultimately depends on translating scale into consistent, long-term profitability.
The Indian e-retail food delivery sector is booming, driven by rapid urbanization and increasing smartphone usage. Valued at around USD 45 billion in 2024, it is expected to grow at a CAGR of over 20%, potentially reaching close to USD 140 billion by 2030. Increasing demand for convenience, diverse cuisines, and expanding tier 2 and 3 city penetration fuel this surge.
With a market capitalization of Rs 2,91,633.60 crore, the shares of Eternal Ltd were trading at Rs 302.15 per share, increasing around 0.40 per cent as compared to the previous closing price of Rs 300.95 apiece.
Stretched Valuation
Eternal Ltd.’s valuation looks stretched, trading at an extremely high P/E of 1,583x. Compared to a normal market range of 15–25x, this means investors are paying roughly 65 times more than typical valuations. Such pricing signals overheated expectations and limited the margin of safety.
Margin Strengthening
However, Eternal Ltd shows a contrasting performance this quarter. Despite a steep 63% drop in net profit to Rs 65 crore, its quick-commerce segment surged 755%, reaching Rs 9,891 crore, signalling strong demand and rapid scale-up. Monthly order growth also hit a ten-quarter high at 137% YoY, supported by aggressive expansion with 272 new stores, taking the network to 1,816 outlets. The business is clearly growing fast, but profitability remains under strain.
Eternal’s quick commerce arm, Blinkit, currently holds over 50% market share in India’s 10-minute delivery segment, making it the clear market leader. Swiggy holds around 20-23% market share, while Zepto is close behind with about 23%. Blinkit’s share has grown significantly from around 40% a year ago, with projections showing continued growth as it expands its store network aggressively.
Additionally, Eternal’s profitability metrics strengthened this quarter, with adjusted EBITDA margin hitting a record 5.3% of NOV and EBITDA crossing Rs 500 crore, up from Rs 451 crore in Q1FY26. Strong operating leverage and improving scale supported this gain. The company is also accelerating expansion, now targeting 2,100 stores by December 2025, above its earlier 2,000-store guidance, signaling continued confidence in demand.
If we talk about the performance of the company’s other segment, in Q2FY26, India food ordering rose to Rs 2,485 cr from Rs 2,012 cr in Q2FY25, showing strong demand recovery. Hyperpure revenue softened to Rs 1,023 cr versus Rs 1,473 cr last year, indicating a slowdown in B2B momentum. The Going Out segment improved to Rs 189 cr from Rs 154 cr, while the residual segment stayed small at Rs 2 cr versus Rs 4 cr.
Eternal Ltd is a fast-growing consumer and quick-commerce player known for its rapid expansion, strong order volumes, and aggressive store rollout. Leveraging technology, efficient fulfilment, and a widening product assortment, the company has scaled quickly across key cities. Despite profitability pressures, Eternal continues to prioritize growth, market share, and operational efficiency.
Conclusion
Eternal’s sky-high P/E reflects strong investor belief in its quick-commerce dominance, rapid scale, and expanding margins, but it also signals significant risk. The business is growing fast, yet profits remain volatile and dependent on sustained execution. Whether the valuation is justified will hinge on Eternal proving it can convert explosive growth into stable, long-term profitability.
Written by Abhishek Singh
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