“Growing higher for longer; raising PT to Rs 390 led by QC. We expect Eternal to trade near term profit maximisation to TAM expansion keeping FY27/28 profit broadly unchanged,” the report said, adding that the higher price target reflects “greater growth durability driving our SOTP driven PT to Rs 390.” JP Morgan said in its note.
The report highlights that Blinkit’s superior service levels, expanding customer base, and market share gains position it strongly to sustain growth momentum over the next few years.
“Our recent Alt data channel checks confirm that Blinkit is expanding its leadership over peers in multiple ways — national store footprint, regional leadership in top cities outside of NCR, product availability across top cities all the while maintaining minimal discounts,” JP Morgan said in its report.
It added that Blinkit is increasingly winning over convenience-seeking shoppers with superior service levels (pace, availability, consistency), while competitors fight over value seekers.
The global brokerage firm pointed out that Blinkit has overcome its late mover handicap in Mumbai and Bengaluru, achieved leadership in Mumbai (from 4th six months ago) and maintained its Top-2 position in Bengaluru.“Blinkit’s network has grown to ~1,750 stores, 1.6x Instamart/Zepto, the highest ratio it’s ever had on a national basis. This gives it the ability to maintain growth for longer and achieve better local brand recall over peers,” the note added.The report also emphasized Blinkit’s ability to capture high-quality customers. “Our data suggests Blinkit is capturing the most profitable convenience seeking customers with peers’ fight over value seekers. This is helped by its higher basket size, lower subsidies and better service levels. Its early mover position across the top 190 cities and leadership position across 190 cities should help it maintain leadership and access to profit pools,” JP Morgan observed.
JP Morgan expects Eternal to prioritize market share and growth durability over near-term profitability.
“We believe Blinkit can sustain higher growth for longer without expanding its break-even and absolute profit timelines. We expect it will prioritise market growth over profit maximization over the next two years. We thus increase our QC FY26/27/28 GOV by 6/22/35% while keeping EBITDA largely unchanged,” the brokerage said.
Analysts at JP Morgan further noted that Zomato’s food delivery segment is showing early signs of recovery as well. “High frequency data suggests Zomato FD app downloads have accelerated on a QQ/YY basis over 2QFY26TD that could hint at a recovery in NOV momentum in the quarter and halt in share loss,” JP Morgan stated.
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