Most expensive Nifty stock ever? Eternal at 455 PE dares you to doubt the hype
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If something is good enough, it would probably be expensive. But at 455 times earnings, Eternal isn't just expensive but in a valuation galaxy of its own. The Nifty 50's newest entrant is also its most richly valued stock, wearing a PE multiple that makes seasoned value investors squirm and growth investors think twice.Don't blame only Eternal. Two other Nifty constituents, Trent (132x PE) and Jio Financial (113x PE), are also sitting pretty above the 100x valuation mark, signaling a shift in investor appetite towards long-term growth over current profits.On the opposite end of the spectrum? Coal India , the public sector behemoth, trades at a humble PE of 6.8x, giving Nifty watchers a vivid picture of the valuation extremes in India's top 50 listed companies.A trailing 12-month (TTM) PE of 455 means investors are paying today for profits the company may earn over the next four and a half centuries, if earnings stood still. But theory rarely captures the speed at which some Indian digital-first companies are expanding. Eternal, formerly known as Zomato, is thriving in two of India's hottest consumer tech battlegrounds: food delivery and quick commerce.Despite investor worries and growing competitive heat, the stock is anything but untouchable.Mutual funds have been lining up for a bite of Eternal. In May alone, they pumped in ₹5,300 crore, making it the third-most bought stock that month, according to estimates by Prime Database.Earlier this month, Morgan Stanley reiterated Eternal as its top India internet pick, citing its market leadership in both food delivery and quick commerce, a superior cost structure, and a balance sheet stronger than its peers. The firm has a target price of ₹320 on the stock.While Eternal shares are down 10% year-to-date, the Street isn't writing it off. Concerns loom large. Rapido's entry into food delivery, intensifying competition from Zepto, BigBasket, Swiggy Instamart, Amazon Now, and Flipkart Minutes in the quick-commerce race but believers say the company's edge lies in execution.BofA Securities' Sachin Salgaonkar returned from a recent internet tour upbeat on Eternal's quick commerce arm Blinkit:'Traction in Tier 2 cities surprised industry experts… some stores hit 1,000 orders per day within 6–9 weeks. Amongst the top platforms, only Zomato continues to add more dark stores while others like Swiggy/Zepto/BigBasket have started to slow down store adds.'That expansion drive, Salgaonkar believes, gives Blinkit a competitive edge, especially as rivals slow store additions. Interestingly, the real kicker isn't convenience or discounts but better product selection, especially in smaller cities.ICICI Securities, too, maintains a Buy rating, valuing Eternal at ₹310 via a three-stage DCF model. The brokerage sees signs of softening pricing wars, noting that Instamart and Zepto have reduced the pricing gap with Blinkit. The end of the discount era may be in sight—a potential profitability trigger.For Jefferies, Eternal is a long-term bet on the digitization of food services. 'With only ~20 million monthly transacting users currently, there's a long runway for growth. Blinkit is already the market leader in quick commerce and is poised for sharp margin improvement.'Palak Shah, VP, PL Capital, adds perspective from the institutional front: 'Markets focus on the total addressable market and execution capability. Eternal has proven itself in food delivery. The belief is now that they can replicate that in quick commerce. Once the capex phase is over, operational efficiency will drive the narrative.'Yet, competition is getting bolder. Rapido's attempt to disrupt the food delivery space by lowering commission rates is leading to speculation that the Gross Order Value (GOV) may start shifting from Zomato.Manish Sonthalia, CIO at Emkay Investment Managers, argues that while the entry barriers are low, fixing unit economics is extremely difficult. 'Just entering and playing the pricing game doesn't guarantee success. Execution capability is crucial. Yes, competition is increasing, but the 'right to win' currently lies with only one dominant player. Others are still evolving. New entrants will have to work really hard.'Eternal may just be the poster child for investors who bet on the future, even when the present valuation feels like a cliffhanger. For now, the 455x question remains: Is the market's faith eternal or just euphoric?: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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Fibre2Fashion
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Trump's penalty talks create unease in Indian textile industry
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First Post
12 minutes ago
- First Post
Has India really stopped buying oil from Russia as Trump claims?
US President Donald Trump says India 'is no longer going to be buying oil from Russia', calling it a 'good step' if true. But Indian officials deny knowledge of any halt, while reports suggest some state refiners briefly paused purchases read more Employees manually fill containers with diesel during a power cut at a fuel station in New Delhi, July 31, 2012. Representational Image/Reuters Speaking to reporters in Washington on Saturday, United States President Donald Trump said: 'I understand that India is no longer going to be buying oil from Russia. That's what I heard, I don't know if that's right or not. That is a good step. We will see what happens.' The comment is Trump's latest in a slew of remarks against India's purchasing of Russian crude oil. Trump has launched a campaign of economic pressure against countries continuing to engage with Russia, threatening tariffs and penalties as leverage to force a resolution to the war in Ukraine. STORY CONTINUES BELOW THIS AD Days earlier, his administration announced a sweeping set of trade measures that would affect around 70 nations, including India. As part of this, a 25 per cent tariff on Indian goods entering the United States took effect, alongside a separate penalty related to purchases of Russian oil and military hardware. Trump also warned that countries buying Russian oil could face tariffs as high as 100 per cent if Moscow does not agree to a peace deal by mid-August. His stance has raised concerns about the potential impact on global markets, given India's role as the largest importer of Russian seaborne crude since 2022. In a strongly worded post on Truth Social, Trump lashed out at India's trade practices and its reliance on Russian defence and energy sectors. 'Also, they have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of energy, along with China, at a time when everyone wants Russia to stop the killing in Ukraine — All things not good!' In another comment, he took an even sharper tone: 'I don't care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India, their Tariffs are too high, among the highest in the World. Likewise, Russia and the USA do almost no business together. Let's keep it that way…' STORY CONTINUES BELOW THIS AD The question: Has India really stopped buying Russian oil? In response to speculation, Indian officials and sources have sought to clarify the country's position. The Ministry of External Affairs (MEA) has not confirmed any change in policy and has made it clear that energy sourcing decisions remain based on price and national interest. MEA spokesperson Randhir Jaiswal, when asked about reports suggesting Indian oil firms had stopped taking Russian crude, said during his weekly briefing, 'We take decisions based on the price at which oil is available in the international market and depending on the global situation at that time. As for the specifics of your particular question, I am not aware of it. I don't have details of these specifics.' Privately, an MEA source echoed this line, telling ANI that energy decisions are grounded in economic realities: 'India's energy purchases are driven by national interests and market forces. We do not have any reports of Indian oil firms halting Russian imports.' Reports of a temporary pause by state refiners While there has been no formal announcement from New Delhi, multiple reports suggest some state-owned refiners may have temporarily paused buying Russian oil in the past week. According to Reuters, India's key state refiners — including Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Mangalore Refinery and Petrochemical Ltd — did not seek Russian crude cargoes recently. This development comes amid narrowing discounts on Russian oil and increased warnings from Washington about the risks of continuing purchases. STORY CONTINUES BELOW THIS AD A man stands at an Indian Oil fuel station in Sonipat, March 5, 2025. Representational Image/Reuters These refiners, which control over 60 per cent of India's combined refining capacity of 5.2 million barrels per day, frequently purchase Russian oil on a 'delivered' basis, meaning suppliers handle shipping and insurance. When they did not place orders, they turned instead to the spot market, buying mostly West Asian and West African crude grades such as Abu Dhabi's Murban. Notably, the country's private refiners — Reliance Industries and Nayara Energy — are the largest individual buyers of Russian crude in India, but the state-owned companies dominate the overall refining landscape. Whether these pauses represent a longer-term shift or merely a short-term adjustment remains unclear. India's reliance on Russian crude since 2022 India became the world's biggest importer of Russian seaborne oil after Europe stopped most purchases in response to Russia's invasion of Ukraine in 2022. This marked a significant pivot in global energy flows: before 2022, Europe had been Russia's largest oil buyer. India now sources nearly 2 million barrels per day from Russia — roughly 35 per cent of its total oil imports — amounting to over $50 billion worth of purchases in the 2024-25 fiscal year, according to official data. STORY CONTINUES BELOW THIS AD The range of Russian crude reaching Indian shores is wide. Imports include Urals from Russia's western ports, ESPO and Sokol from the Pacific, and some grades from the Arctic. Urals, the largest Russian export grade, is particularly reliant on India; up to 70 per cent of its exports are absorbed by Indian refiners. Russia's state oil giant Rosneft has also become deeply intertwined with India's refining sector, holding a significant stake in one of the country's largest refineries, which further cements the commercial relationship. Why purchasing Russian oil is not illegal Officials and industry sources defending India's Russian oil imports underline that the purchases are not only lawful but beneficial for global energy stability. Sources speaking to ANI stressed that Russian oil has never been sanctioned outright by the US or the European Union. Instead, a price-cap mechanism was introduced by the G7 and EU to restrict Moscow's revenues while ensuring crude continued to flow into world markets. India has adhered to this framework, ensuring all purchases stayed below the cap — currently $60 per barrel — while securing affordable energy supplies. The same sources argued that India's strategy helped prevent a worse crisis: 'Had India not absorbed discounted Russian crude combined with OPEC+ production cuts of 5.86 mb/d, global oil prices could have surged well beyond the March 2022 peak of US $137/bbl, intensifying inflationary pressures worldwide.' STORY CONTINUES BELOW THIS AD This perspective paints India not as an outlier, but as a stabilising force in global oil markets, especially at a time when other buyers, including the EU, continue to import Russian-origin energy in other forms. For instance, during this period, the EU remained the largest buyer of Russian liquefied natural gas (LNG), accounting for 51 per cent of exports, with China and Japan following. How Moscow could retaliate Analysts warn that any sharp reduction in Indian demand for Russian oil could provoke a major response from Moscow. Russia's exports to India are so vital that they now make up a substantial share of the Kremlin's revenues. Experts at JP Morgan have cautioned that if India's imports were disrupted, Moscow could retaliate by closing the Caspian Pipeline Consortium (CPC) pipeline from Kazakhstan. This pipeline is critical for US energy majors like Chevron and Exxon, who have significant investments in Kazakh production. Any closure of CPC would create another severe supply shock, reverberating across the global oil market. How India would manage without Russian oil If India were to scale back or halt Russian purchases, the adjustment would be complicated and costly. Refiners would have to increase imports of US and West Asian crude or reduce refining activity. Either path could send ripples through the global economy. A cut in refining runs would immediately tighten diesel supply. India is a significant exporter of refined fuels, especially diesel, to Europe. Reduced output in India would likely push European diesel prices higher. STORY CONTINUES BELOW THIS AD Switching suppliers on a large scale would also require logistical and contractual adjustments. India's refiners have integrated Russian crude into their operations over the past two years; unwinding that flow would not happen overnight. Meanwhile, private refiners — which account for a large chunk of Russian crude purchases — have not publicly signalled any change. Donald Trump's claim that India has stopped buying Russian oil remains unverified. With inputs from agencies
Indian Express
12 minutes ago
- Indian Express
Even before Trump's ‘penalty' threat, Indian refiners began cutting down on Russian oil imports
Amid increasing pressure on India from the US and other Western powers over the past couple of months, Indian refiners — led by public sector players — began cutting down on Russian oil imports, much before US President Donald Trump's announcement earlier this week of an unspecified tariff 'penalty' on New Delhi for its defence and energy imports from Moscow. Latest vessel tracking data shows that July deliveries of Russian crude — which would have been contracted May or early June — to Indian refiners fell significantly. Industry and trade sources also indicated that Indian public sector refiners have, for the time being, halted future contracting of Russian oil, the mainstay of India's oil imports for the better part of the past three years. Trump has now said that he 'heard' that India will no longer be buying oil from Russia, calling it a 'good step', but also added that he is not sure if the information is 'right or not'. 'Well, I understand India no longer is going to be buying oil from Russia. That's what I heard. I don't know if that's right or not, but that's a good step. We'll see what happens,' Trump told reporters in the US on Friday. Meanwhile, India — the world's third-largest consumer of crude oil with an import dependency level of over 85 per cent — continues to maintain that its oil purchases are commercial decisions. 'We take decisions based on the price at which oil is available in the international market and depending on the global situation at that time,' Ministry of External Affairs Spokesperson Randhir Jaiswal said Friday in response to a question on whether Indian refiners have stopped buying Russian oil over the past few days. Industry insiders, experts, and trade sources indicate that renewed pressure and threats from the US and Europe over the past few weeks have cast a shadow on India's Russian oil imports, and could mark the beginning of Indian refiners pivoting away from Moscow's oil. So far, India had successfully managed to walk 'the fine line between energy security and geopolitical pressure', but its options now appeared limited, one expert said, adding that Indian refiners 'must now plan not just for commercial shifts, but for systemic geopolitical realignment'. Deliberations are on between the government and other stakeholders — primarily refiners — on managing the situation and assessing the choices on the table for India, sources said. With a pre-emptive reduction in Russian oil imports, some bit of signaling has already taken place. The next steps would most likely be decided on how the India-US dynamic evolves, and more importantly, whether or not Trump decides to further harden the American stance and rhetoric against Russia. Any breakthrough between the White House and Kremlin over the Russia-Ukraine war would most likely ease the pressure on buyers of Russian crude. This renewed pressure from the West — forcing Russia's top trade partners to cut down on imports from the country — are aimed at forcing the Kremlin's hand into ending the war in Ukraine. For Trump, who wants the three-year-old Russia-Ukraine war to end within days, this is an opportune time to pressurise countries like India and China over their Russian imports, given the sensitive trade negotiations that these countries are holding with the US. India's Russian oil imports in July were at 1.6 million barrels per day (bpd), down 24 per cent from June levels, and 23.5 per cent from volumes delivered in July of last year, according to latest tanker data from global real-time data and analytics provider Kpler. The share of Russian crude in India's oil import basket in July contracted notably to around 33.8 per cent from July's 44.5 per cent. While the drop in oil imports from Russia is evidently more pronounced among Indian state-owned refiners, likely reflecting heightened compliance sensitivity amid mounting risks, private sector refiners—who account for over half of Russian crude imports, have also reduced exposure to Moscow's oil. The reduction in import volumes from Russia in July was offset by higher crude deliveries from other suppliers — mainly Iraq, Saudi Arabia, the United Arab Emirates, the US, Nigeria, and Kuwait — all of which expanded their share in India's oil imports vis-à-vis June levels. With much of the West shunning Russian crude following the country's February 2022 invasion of Ukraine, Russia began offering discounts on its oil to willing buyers. Indian refiners were quick to avail the opportunity, leading to Russia — earlier a peripheral supplier of oil to India — emerging as India's biggest source of crude, displacing the traditional West Asian suppliers. While the discounts have varied over time, Russian oil flows to India largely remained robust despite Western pressure and limited sanctions on Russia's oil trading ecosystem. But the appears to be changing now, and fast. 'On one side, the EU's (European Union's) sanctions — effective from January 2026 — ban imports of refined products derived from Russian-origin crude, forcing Indian refiners to segment crude intake and product flows. On the other hand, the US tariff threat raises the possibility of secondary sanctions that would directly hit the shipping, insurance, and financing lifelines underpinning India's Russian oil trade. Together, these measures sharply curtail India's crude procurement flexibility, raise compliance risk, and introduce significant cost uncertainty…(it) represents a double whammy for Indian refiners,' said Sumit Ritloia, Lead Research Analyst, Refining & Modeling at Kpler. Before this week's tariff announcement by Trump mentioning a 'penalty' on India, India's significant Russian oil imports were being subjected to a more aggressive stance by Western powers for a few weeks. Trump himself had had threatened 'biting' secondary tariffs of 100 per cent on buyers of Russian exports, and the European Union last month announced a sanctions package, widely seen as the most comprehensive effort yet by the EU to restrict Russia's revenue stream, placing a ban on import of fuels into Europe if made from Russian oil in third countries like India, and also sanctioning Indian refiner Nayara Energy, in which Russian oil giant Rosneft holds 49.13 per cent stake. According to Petroleum Minister Hardeep Singh Puri, the massive market share of Russian crude in India's oil imports doesn't mean that India is dependent on Russia for oil, and other suppliers can quickly come in to replace Russian volumes if there is any major disruption. 'I don't feel any pressure in my mind. India has diversified the sources of supply… I'm not worried at all. If something happens, we'll deal with it…there is sufficient supply available,' Puri had said at an event earlier in July. He added that India in recent years has expanded its crude sourcing slate from 27 countries to around 40 countries, and enough oil was available globally for India to buy and ensure energy security. If India indeed decides to shift away from Russian crude, industry insiders and experts expect New Delhi to negotiate a potential wind-down period for reducing supplies, as replacing the massive volumes of Russian oil supply overnight is impossible, according to industry insiders. It would take at least three-four months to substantially cut down on imports and shift to other suppliers — mainly in West Asia, but also in Africa, and even the US and Latin America. Loss of discounted Russian barrels would certainly push up the relative cost of imports by a few dollars a barrel, which in turn would inflate India's oil import bill by billions of dollars on an annualised basis. Additionally, if global oil prices rise in the eventuality of most of Russian oil going off the market, the hit for India would be amplified further. 'Replacing Russian crude isn't plug-and-play…it is no easy feat—logistically daunting, economically painful, and geopolitically fraught. Supply substitution may be feasible on paper, but it remains fraught in practice. Gulf barrels come with pricing rigidity, African grades add freight volatility, and Latin American flows face availability constraints,' said Ritolia. India's traditional crude suppliers in West Asia — chiefly Iraq, Saudi Arabia, and the UAE — would be the logical fall-back, but Indian refiners will have to grapple with significant constraints as they reduce Russian oil imports. A lot of the crude from West Asia comes through term contracts, unlike spot purchases of Russian crude, which may force Indian refiners to commit to higher annual offtake of West Asian oil, which is more rigidly priced compared to discounted Russian crude. Also, a number of Indian refineries that had gotten attuned to processing Russian crude in large volumes may see an impact on their product yield and refinery configurations due to crude quality mismatch. India is also expected to sustain its ongoing efforts to diversify its sources of crude oil. Geopolitical shifts, freight economics, and refinery economics are expected to continue shaping India's crude sourcing decisions and diversification strategy. Sukalp Sharma is a Senior Assistant Editor with The Indian Express and writes on a host of subjects and sectors, notably energy and aviation. He has over 13 years of experience in journalism with a body of work spanning areas like politics, development, equity markets, corporates, trade, and economic policy. He considers himself an above-average photographer, which goes well with his love for travel. ... Read More
