Macquarie Equity Research has published its third comparative analysis of Eternal Limited (Zomato) and Swiggy Limited — titled “Head-to-Head: Eternal vs Swiggy (v.3) — Field of Dreams or Pyrrhic land grab?” — downgrading Swiggy from Neutral to Underperform with a target price cut of 21% to ₹230 from ₹290, while maintaining its existing Underperform rating on Eternal with a 5% target price cut to ₹190 from ₹200.
The report is the most comprehensive articulation yet of Macquarie’s structurally bearish view on both Indian quick commerce platforms — and its core argument is that the market’s optimism about quick commerce TAM and unit economics rests on extrapolating the best-performing mature city results across an entire portfolio that has not demonstrated similar economics.
The quick commerce debate
Macquarie agrees with the broad TAM thesis — quick commerce is under-penetrated at less than 1% of retail and the product-market fit is demonstrably strong. The brokerage even acknowledges Blinkit’s own disclosure that some of its larger, more mature cities including Delhi NCR are approaching 5-6% steady-state adjusted EBITDA margins, with solid underlying economics and strong customer retention.
The disagreement is with what the market does next — extrapolating those mature city results across the entire network and building in a consensus expectation that the overall portfolio will achieve top-10% economics simply as a function of time.
Macquarie’s counter is three-pronged. First, competitive intensity is rising and will persist for years — not quarters — across multiple dimensions including horizontal platforms, omnichannel retail, and new entrants. Zepto’s listing progress and Amazon Now, Flipkart Minutes, and BigBasket’s ability to close the loyalty loop through cashbacks and rewards are near-term downside risks that the consensus is underweighting. Second, QC unit economics are challenged as competition dents both the top line — through pressure on customer fees and ad revenues — and costs — through higher inventory turns pressure, elevated rentals, discounting, and labour costs. Third, there is no clear app engagement leader in quick commerce, and horizontal e-commerce players have a structural advantage in loyalty through cashback and rewards programmes that pure-play quick commerce cannot easily replicate.
On Swiggy specifically, Macquarie estimates approximately $2 billion of value is being ascribed to Instamart by the market — against its own estimate of zero to negative value based on the consensus valuation for Food Delivery. With Swiggy’s shares already approximately 40% below IPO price, the brokerage’s framework suggests Instamart’s embedded valuation provides no floor support.
The Food Delivery picture
In the more mature food delivery segment, Macquarie sees the duopoly holding between Eternal’s Zomato and Swiggy, though its growth and margin forecasts are below consensus. The brokerage notes that Visible Alpha consensus builds in long-duration approximately 20% gross order value growth, while Macquarie’s forecasts remain in the low-to-mid-teens. Swiggy trails Zomato by approximately 200 basis points on adjusted EBITDA margin at scale, though contribution margin economics per order are broadly similar. Macquarie considers current overall take-rates — at 25% of order value — high and margins for Zomato near a peak.
Eternal: the Blinkit implied valuation
For Eternal, Macquarie estimates the implied valuation for Blinkit at $9-15 billion based on consensus minus the Macquarie-derived value of Zomato’s Food Delivery business. The brokerage maintains Underperform on Eternal at ₹190, reflecting its view that even the $9-15 billion Blinkit valuation range is optimistic given the competitive dynamics described above. The target cut of 5% from ₹200 to ₹190 is on lower QC valuation assumptions.
The relative preference
Within the two stocks, Macquarie places a stronger probability of success for Blinkit relative to Instamart — reflecting Blinkit’s more mature city economics, higher store density, and integration with Zomato’s food delivery network and customer base. This does not translate to a positive recommendation on Eternal — which remains Underperform — but it does make Swiggy the more concerning position of the two on the brokerage’s framework.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.