Eternal Becomes Top Mutual Fund Pick as Quick Commerce Competition Heats Up

Eternal Ltd has emerged as the biggest stock bet for mutual funds in August. Data from Nuvama shows MFs bought ?7,200 crore worth of shares during the month, adding 22.9 crore shares to their holdings. By the end of August, MFs owned 225.6 crore shares of Eternal, up from 202.7 crore in July. At Monday’s intraday price of ?322.10, these shares were valued at around ?72,665 crore.

At the same time, competition in the quick commerce (QCom) market is intensifying. Amazon’s QCom arm, Amazon Now, recently expanded to Mumbai after launching in Bengaluru and Delhi. While Amazon has only 100 dark stores compared to Blinkit’s 1,544 and Swiggy’s 1,062, analysts say its deep pockets and ambition could make it a serious player in the future.

Brokerage firm Emkay, however, believes existing players like Blinkit and Swiggy are better positioned. “Building an entirely new supply chain will be a challenge for Amazon. Incumbents also have strong brand recall and loyal customers,” it said. Emkay added that while heavy competition may hurt short-term profits, customer loyalty should help leading players hold their ground. Eventually, the firm expects weaker players to exit, leading to consolidation and better profitability. Emkay maintained a “Buy” call on Eternal with a price target of ?330, noting Blinkit’s strong execution.

Meanwhile, Motilal Oswal Financial Services (MOFSL) pointed out that food delivery growth has slowed due to weaker consumer spending and broader economic pressures. Quick commerce margins, it said, are under pressure from higher competition, rapid dark store expansion, and rising customer acquisition costs.

Even so, MOFSL believes the cycle is improving. It has raised its food delivery growth estimates to 21–23% for FY26–FY27, compared to 19–20% earlier. It now values Eternal’s food delivery arm at 35 times FY27 expected Ebitda and has given a “Buy” rating with a higher target price of ?420.