Eternal Ltd, an Indian digital commerce firm, is witnessing a split in investor sentiment as its market cap soars to ₹3 trillion. While foreign investors are reducing exposure citing valuation concerns, domestic institutions are ramping up bets on its long-term growth, especially driven by Blinkit’s expansion.
Eternal Ltd, a major player in India’s digital commerce space, is drawing sharply contrasting reactions from the global and domestic investment communities as it touches a landmark ₹3 trillion market capitalization in July 2025 — surpassing even industry giants like Tata Motors and ONGC.
In a telling shift, Foreign Institutional Investors (FIIs) have reduced their stake in Eternal Ltd from 58% to 42% over the last three years. This reflects growing discomfort with Eternal’s current valuation levels — currently trading at nearly 9x sales — and concerns over a business model that still reports negative free cash flow and lacks sustained profitability.
“Valuations appear to be ahead of fundamentals,” according to analysts tracking the sector. Eternal’s aggressive pricing, continued store expansions, and limited margin visibility make global investors uneasy — especially those grounded in mature market metrics. In comparison, global peers trade at significantly lower price-to-sales ratios, despite more stable earnings profiles.
Also Read: Eternal Cash Reserves Surge to ₹18,857 Cr in Q1FY26
In stark contrast, Domestic Institutional Investors (DIIs) have quadrupled their shareholding — from 6% to 26.5% over the past year. This aggressive accumulation highlights a distinctly Indian belief in Eternal’s long-term potential, driven by underpenetrated markets and the promise of digital-first consumption growth.
A major driver behind DII optimism is the strong momentum in Blinkit, Eternal’s instant delivery arm, which posted a 155% YoY growth in Gross Order Value (GOV) in Q1 FY26. The management expects Blinkit to scale up to 2,000 outlets by the end of the year — a move seen as crucial for category leadership.
However, some analysts are skeptical of the margin outlook amid this rapid expansion. Concerns center on the risks of diluting profitability, especially while entering lower-tier cities where per capita spend is lower and operational challenges are higher.
Despite the divergence in institutional sentiment, one thing is clear: Eternal’s narrative is powerful enough to attract substantial backing from local investors bullish on India’s digital transformation. Whether that optimism will ultimately be justified — or whether global caution proves prescient — remains to be seen.
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