The price target for Eternal implies a potential upside of 26%, while that for Swiggy implies a potential upside of 30% from Tuesday’s closing levels.
DAM Capital believes that the food businesses of both these companies have matured, and therefore, it expects margin expansion and strong free cash flow growth over the next three years, driven by lower capex an improved working capital efficiency.This free cash flow, will support the funding of quick-commerce operations for both these companies, with Blinkit likely to reach profitability on the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) front by the fourth quarter of this financial year, while Swiggy’s Instamart will reach this landmark by the fourth quarter of financial year 2028, according to the DAM Capital note.
The brokerage is projecting a revenue growth of 42% for Eternal and 28% for Swiggy over financial year 2025-2028. It is also anticipating Swiggy to reach PAT profitability by financial year 2028, while Eternal is already PAT profitable.
Gross Order Value (GOV) for both these companies is likely to increase between 18% and 20% for both these companies going forward, while EBITDA margin improvement will fuel a Compounded Annual Growth Rate (CAGR) of 30% and 60% for Eternal and Swiggy respectively over the next three years, according to DAM Capital.
Shares of Eternal are trading at record highs, ending 2% higher on Tuesday at ₹321. The stock has risen 18% in the last one month. Shares of Swiggy too, ended 2.1% higher on Tuesday at ₹408.4, having gained only 3.5% in the last one month.
