Goldman Sachs Bets on 67% Blinkit Growth, Lowers Target for Eternal Despite Swiggy Competition

Goldman Sachs Bets on 67% Blinkit Growth, Lowers Target for Eternal Despite Swiggy Competition​

Multinational brokerage Goldman Sachs has recently revised its 12-month share price target for Zomato’s parent, Eternal Ltd. The firm maintained a positive 'buy' rating on the stock, suggesting confidence despite reducing the target price from Rs 380 to Rs 350. This revised target still implies a significant upside potential of 45% over the previous closing price on the NSE.

Analysts highlighted that concerns regarding Blinkit’s total addressable market (TAM) may be overstated from a valuation standpoint. While the food delivery market shows high penetration—remaining above 50% in India's multi-touchpoint unit (MTU)—the underlying TAM for Blinkit appears highly underpenetrated.

Goldman Sachs Maintained 'Buy' Rating Despite Target Cut​

Despite the intense competitive environment, analysts remain positive about the company's ability to improve margins. Management levers are viewed as sufficient to counteract any near-term headwinds, suggesting that the margin story remains intact over the long term.

The report acknowledges that competition remains fierce, with Swiggy Ltd. expected to continue gaining market share. However, the analysis suggests Blinkit has faced recent growth pressure primarily due to elevated competition from both established players and new market entrants.

Analysts Predict Strong Growth Trajectory for Blinkit and Zomato​

Goldman Sachs provided strong growth projections, positioning the company well ahead of general market expectations. The brokerage estimates Blinkit will achieve 67% year-on-year net order value (NOV) growth in FY27.

Furthermore, the firm forecasts overall Zomato NOV growth at 36% over the period spanning FY26 through FY28. These projected numbers are materially higher than both street consensus and the forecasts provided by global and domestic food-delivery competitors.

Analysts suggested that the risk-reward ratio remains favorable. They calculated an estimated 74% upside potential in a bull case versus only 18% downside in a bear case, strongly supporting the positive investment stance.

Assessing Market Risks and Underpenetrated TAM​

While some investors fear Blinkit’s FY27 NOV growth might drop below 50% in a bear scenario, the brokerage views this outcome as low probability. This assessment is based on the conviction that the TAM for quick commerce is still nascent, even amid ongoing competitive risks.

Analysts noted that the stock valuation could significantly improve if the market gains confidence in Blinkit's ability to sustain mid-teens sequential NOV growth starting in the June quarter.

Sector Comparison: Eternal vs. Swiggy Performance Snapshot​

Analyzing the broader sector, the stock movements reveal differing trends. Over the last 12 months, Eternal shares have risen 8%, though they have fallen 14% year-to-date. In sharp contrast, Swiggy shares have experienced a decline of 17% over the last 12 months and a 29% fall year-to-date.

The consensus view on Eternal remains robust. According to Bloomberg data, thirty out of the thirty-three analysts tracking the stock maintain a 'buy' rating. The average 12-month price target of Rs 362 indicates a potential upside of 51% for investors.