Why Eternal shares are falling today despite Blinkit optimism

Shares of Eternal declined 2.74% to ₹234.57 on the NSE on May 18, 2026, even as broader markets remained relatively stable. The stock has now corrected sharply from its 52 week high of ₹368.45 and is trading near the lower end of its yearly range of ₹212.60 to ₹368.45.

The weakness follows a cautious note from global brokerage Macquarie, which maintained its “Underperform” rating on Eternal and reduced its target price to ₹190 from ₹200, citing rising competitive pressure in quick commerce and concerns around Blinkit’s long term valuation.

Why Macquarie remains cautious

Macquarie’s thesis is centred around Blinkit, Eternal’s quick commerce business, which remains the biggest driver of investor optimism and valuation expectations.

The brokerage estimates Blinkit’s implied valuation at around $9 billion to $15 billion, based on residual valuation after accounting for the food delivery business. While Macquarie acknowledged that mature markets like Delhi NCR are already approaching 5-6% adjusted EBITDA margins, it warned that investors may be extrapolating those economics too aggressively across the entire network.

According to the brokerage, the economics of quick commerce differ significantly across micro markets. Stores in dense urban clusters generate far better throughput and profitability than expansion stores in smaller cities, making portfolio wide profitability harder to achieve than current market expectations suggest.

Competition in quick commerce remains the biggest concern

The main overhang remains the intensifying competition in India’s quick commerce market.

Macquarie highlighted the aggressive expansion by Zepto along with increasing investments by Amazon, Flipkart and BigBasket.

The brokerage believes the market is underestimating how long competitive intensity could persist. Increased discounting, higher customer acquisition costs and elevated delivery expenses are expected to keep profitability under pressure for the entire sector.

Macquarie also flagged Zepto’s expected IPO in 2026 as a potential trigger for even more aggressive market share battles and higher spending across the industry.

Food delivery margins may have peaked

Apart from quick commerce concerns, the brokerage also warned that food delivery margins may be approaching their peak.

Macquarie believes current take rates of around 25% in food delivery are already elevated, limiting the scope for further margin expansion. The brokerage also expects food delivery growth to remain below broader market expectations over the medium term.

Market remains divided on valuation

Despite the downgrade, Eternal continues to command a massive market capitalisation of approximately ₹2.15 lakh crore and trades at a very high P/E multiple of over 600, reflecting the market’s long term growth expectations around Blinkit and the broader quick commerce opportunity.

However, today’s decline suggests investors are becoming increasingly sensitive to questions around sustainability of growth, profitability timelines and valuation premiums in India’s rapidly evolving quick commerce space.

Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.