Shares of Eternal have come under pressure following investor concerns around leadership changes, with market participants reassessing valuations even as optimism around quick commerce remains intact. The stock, which had earlier rallied sharply on growth expectations, has seen a sharp correction, prompting debate on how much of the downside is already priced in.
Responding to a query on ET Now about where the recent “Deepinder Goyal shock” could settle, market expert Sandip Sabharwal drew parallels with global precedents where leadership transitions unsettled investors.
“Yes, this reminds me of when Elon Musk moved out of Tesla and decided to work with President Trump and all that. The stock took a big beating because leadership matters. If the leader’s attention is getting diverted to other things, then investors need to get concerned. Let us see whether a continued slide makes some decision changes happen or whatever happens, and how that plays out,” Sabharwal said.
He pointed out that the recent correction has come despite bullish commentary post-results.
“After the results, all analysts were so bullish and most people upgraded earnings projections, and from there the stock actually fell drastically. I still think the earnings do not justify this valuation overall. Fundamentally, the stock is not cheap, but the main reason for this correction is obviously the CEO change,” he added.
Quick commerce has been a key driver of Eternal’s valuation, with investors betting on strong growth over the next few quarters. However, Sabharwal cautioned that this segment remains highly competitive and volatile.
“Valuations were at a premium because of the perception of leadership. Quick commerce as a business is highly competitive. They have actually done pretty well because they had indicated continued losses but ended up doing much better, which is why most analysts are still bullish,” he said.At the same time, he flagged the sensitivity of earnings to growth momentum.
“Quick commerce is a business where profitability can fluctuate very sharply with growth numbers. A small slowdown in growth can really lead to an earnings dip. Food delivery overall has been slowing down. So, I am not so excited about the company at this stage. Maybe at cheaper valuations we could see interest, but valuations are still expensive,” Sabharwal noted.
When asked how much lower the stock would need to fall to become attractive, Sabharwal referred to older valuation benchmarks.
“If you go by the way valuations used to be done, the stock maybe should be good at 120–150. Whether it will go there or not is something we will see. I do not think it will go there, but if it goes there, then we could be buyers,” he said.
Beyond Eternal, Sabharwal struck a more optimistic note on the broader consumption theme, citing improving trends across FMCG players.
“Despite soaps as a category not doing well, the numbers were decent. Marico’s pre-sales numbers were decent, and Bajaj Consumer came out with very strong numbers. It indicates that there is a pickup in consumption, and it could become better this quarter and going forward,” he said.
He added that several large-cap names could offer opportunities as earnings season progresses.
“There is Dabur, Tata Consumer, HUL, Asian Paints. I would think all of them offer decent potential from here,” Sabharwal said.
On the macro front, Sabharwal said the recently announced EU trade deal should be viewed positively, even as markets await progress on an India–US agreement.
“This EU trade deal should be taken positively, but it might take time to get implemented as all states have to ratify it. Directionally these are positive moves. EU is not a small market. India exported $75 billion to the EU and $85 billion to the US, and the rupee depreciation against the euro creates a significant opportunity,” he said.
However, he underlined that persistent foreign investor selling continues to cap market upside.
“The main reason for the fall in markets is the huge selling from foreign investors. If ₹4,000–5,000 crore of selling happens on a daily basis, there is no way the markets can go up,” Sabharwal said.
While foreign institutional investors have been net sellers through 2025, the pace has accelerated in early 2026.
“Last year was an $18 billion 12-month outflow. This January itself is nearing $4 billion. It is sustained selling in a short period of time,” he added.
For now, analysts suggest that while pockets of consumption and trade-led optimism are emerging, leadership clarity and valuation comfort will be key for Eternal before investor confidence fully returns.