The one stock CLSA’s India analyst bets $1 million on for the next 5 years

In its latest Bits & pieces report, CLSA asked its regional sales and research staff if they had $1 million to invest in one stock CLSA covers on a five-year total return time frame, which would it be? CLSA's India team suggested Eternal Ltd (erstwhile Zomato). The reason? It's a leader across financial and non-financial metrics in a disruptive space of quick commerce and has massive total addressable market, Suveer Prem Chainani, who heads CLSA's India Sales, replied adding that CLSA's Aditya Soman has written a lot on Eternal with big target prices.

Calling Eternal, a turnaround story, CLSA's Head of India sales said India's food delivery business is underway. exhibiting positive momentum in monthly transacting users with higher order frequencies that energise contribution and Ebitda margins. Strengthening the transacting customer base is driving increased visibility about contribution, breakeven points and profitability. galvanising higher valuations, Suveer Prem Chainani, who heads CLSA's India Sales said. 

CLSA said Blinkit is now bigger than food delivery, with QC's net order value (NOV) growing 127 per cent YoY (25 per cent QoQ) and contribution growing 81 per cent YoY (flat contribution per order QoQ), despite adding 905 stores YoY on a base of 639. Blinkit's QC GOV/contribution was 8 per cent/6 per cent above CLSA's estimate. 

"Its Ebitda loss was broadly in iine with our expectation but better than consensus. Food delivery saw in-line GOV but missed on margin. We raise our FY26-27CL earnings forecasts and lift our target price from Rs 375 to Rs 385. We reiterate our high conviction O-PF rating," CLSA said. On Monday, the stock was trading at Rs 321.10, up 2.20 per cent. 

CLSA estimated Eternal's EPS growth at 214 per cent YoY this year, 212 per cent in FY27 and 72.8 per cent in FY28.