Shares of Swiggy Ltd soared nearly 8% today, reflecting investor confidence after Eternal, the parent of Zomato, posted strong Q1 earnings and signaled no imminent threat to the existing food delivery duopoly in India. The reassurance came at a time when new players like Rapido are attempting to disrupt the market with alternative models.
In a letter to shareholders, Deepinder Goyal, Group CEO of Eternal, stated that he does not see any innovation in the space that poses an obvious threat to their core food delivery business at present. “New ideas, new entrants, and disruption are all inevitable. I think it also makes our business stronger as long as we are able to learn, adapt, and out-innovate potential competition,” he wrote. Goyal’s remarks appeared to allude to Rapido, which has announced plans to expand its food delivery business in Bengaluru and other cities by working with restaurants on a subscription model rather than charging a 20–30% commission like Swiggy and Zomato.
Despite such announcements, brokerage Nirmal Bang maintained a bullish stance on both Swiggy and Eternal, initiating coverage with a positive outlook. The brokerage highlighted their leadership positions in the Indian food delivery and quick commerce markets and forecast a compound annual growth rate (CAGR) of 17–22% for the industry between FY23 and FY28. Nirmal Bang assigned a fair value of ₹500/share for Swiggy and ₹315/share for Eternal, suggesting up to 31% upside for both stocks.
The report acknowledged that Swiggy has been closing the margin gap with Zomato, reducing the difference from over 140 basis points in Q2FY24 to about 81 basis points by Q4FY25. Swiggy’s revenue is projected to reach ₹8,850 crore by FY27, driven by an estimated 18% CAGR in gross order value (GOV) over FY25–FY27. Eternal, meanwhile, maintained its leadership in food delivery with a FY25 GOV of ₹38,646 crore — 34% higher than Swiggy — supported by a robust three-year CAGR of 22% and stronger monetization.
In the quick commerce segment, Eternal’s Blinkit continues to outpace Swiggy’s Instamart, posting nearly double the GOV in FY25 and a higher average order value. Blinkit’s GOV is expected to grow at a 72% CAGR through FY27. Swiggy, however, has been actively expanding its quick commerce presence, opening 412 new dark stores in Q3 and Q4 of FY25, aiming to improve margins and utilization.
Valuation-wise, Swiggy’s food delivery business is priced on par with Zomato at 42x EV/EBITDA on FY27E metrics, while its Instamart division is valued at a 50% discount to Blinkit, reflecting the latter’s stronger scale and profitability.
At the time of writing, Swiggy shares were trading at ₹425.10, up 7.69%, as investors responded positively to Eternal’s results, management commentary, and brokerage projections affirming the dominance of Swiggy and Eternal in India’s food delivery landscape.
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