Eternal shares up 30% since March. Investors are feasting, but can Zomato’s parent justify the appetite?
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Shares of Eternal, the parent company of food delivery major Zomato and quick-commerce platform Blinkit, have surged nearly 30% since the end of March, mirroring the exuberance in India’s broader market. But with a staggering price-to-earnings ratio of 480 and profitability still some distance away in its fast-growing verticals, investors are now asking the key question: can this rally endure? The optimism around Eternal is largely rooted in Blinkit, its quick commerce arm that has posted triple-digit annual growth and is fast expanding its footprint. “The Indian retail industry is a trillion dollar industry in terms of size, but it is still largely unorganised,” said Kunal Vora, Head of India Equity Research at BNP Paribas. “We have seen a modern trade making some inroads, but it has still been restricted to top cities… what we saw with quick commerce is very strong growth over the last couple of years driven by the dark stores which pro...