Food delivery stock to buy: Shares of Eternal Limited have delivered nearly 36% return in six months. Continued strong growth in quick commerce, improving customer retention and better operating efficiency are likely to boost the outlook for the Zomato parent firm, according to experts.
Eternal share price ended marginally higher on Friday after gaining nearly 3% over the last week. As the stock has also delivered promising returns over the past six months, experts continue to remain bullish on the stock.
Improvement in Blinkit sales, strong retention and growing customer base are likely to support Eternal business. Additionally, affordability is driving growth without hurting margins of Eternal, according to Joindre Capital Services Limited, which sees strong growth potential in District, Eternal’s going-out app for movie tickets, live events, dining and sports-venue bookings.
“The outlook remains positive, led by continued strong growth in quick commerce, improving customer retention and better operating efficiency. Management indicated that Blinkit’s long-term adjusted EBITDA margin guidance has been raised to around 6% from the earlier 5–6% range, supported by higher capex per store, larger store formats and improving productivity,” read the brokerage report.
Strong competition in the quick commerce space is a key concern for Eternal growth. Growth in Blinkit’s business depends on winning through density and execution rather than price.