The stock fell nearly 6 per cent during intraday trading on Tuesday and has fallen more than 10 per cent in the last six sessions, yet Jefferies believes that it has strong growth potential in the medium term.

The brokerage firm is confident in the shares of this food delivery platform.

Jefferies Buy Rating On Eternal: Amid sharp volatility in global markets and the recent fall, brokerage firm Jefferies has expressed confidence in online food tech company Eternal (formerly Zomato ), giving it a 'buy' rating and setting a target price of Rs 480, which is about 78 percent upside from current levels. Although the stock saw a decline of about 6 percent during intraday trading on Tuesday and has fallen by more than 10 percent in the last six sessions, Jefferies still believes that it has strong growth potential in the medium term.

Why trust Jefferies?

According to the brokerage, the company could expand at a rate of approximately 20%, as the consumer trend of ordering food at home continues to strengthen. The report also states that the food delivery business will continue to be a cash engine for the company, and its margins are expected to improve to 5% to 6% in the long term.

Additionally, the quick commerce segment, particularly the company's Blinkit unit, could prove to be a major growth driver in the future. However, increasing competition in this area is also seen as a risk that could impact Blinkit's performance in the future.

Why is the increase expected?

Investors' biggest concern is whether the company's current profitability will be sustainable. A report by brokerage firm Jefferies states that management is confident that current profitability can be maintained. Management has clarified that the profitability shown in the recent quarterly results is the result of genuine operational improvements, not a temporary or artificial change.

Additionally, questions were raised about the company's founder, Deepinder Goyal, transitioning from CEO to Vice Chairman. The brokerage stated that management clarified that this change was a personal decision to allow him to focus on new ideas and initiatives. According to the company, this change will not adversely impact Eternal's daily operations or strategic direction.