At the same time, Motilal Oswal has maintained its “buy” recommendation on Swiggy’s peer Eternal, and a price target of ₹420 implies a potential upside of 29% from Thursday’s close.
Structural tailwinds and upsides to earnings estimates for both these companies led to an upgrade for Swiggy and a positive view from Eternal by Motilal Oswal.The brokerage believes that the food and quick commerce industry, which faced multiple headwinds over the last few months, is seeing a turnaround cycle, and the food delivery growth, which stunted between 17% and 18%, is likely to accelerate beyond 20% over the next two to four quarters.
Motilal Oswal also expects discretionary spending to rebound courtesy of the GST reforms, which could also lead to an increase in dining out and at-home delivery trends. This, in turn will boost platform order volumes and order frequency.As a result, Food Delivery growth estimates for both Zomato and Swiggy have been raised to 21% and 23% between financial year 2026 and 2027, in comparison to the earlier projection between 19% to 20%.
“On the QC side, we bring forward our profitability assumptions for Instamart and Blinkit, as easing competitive intensity, moderating dark store expansion, and declining customer acquisition costs have accelerated the path to breakeven,” Motilal Oswal wrote in its note.
26 analysts have coverage on Swiggy, of which 21 have a “buy” rating, three say “hold”, while two have a “sell” recommendation.
For Eternal, 29 out of the 33 analysts covering the stock have a “buy” rating on it, while the other four have a “sell” rating.
Shares of Eternal are trading close to all-time high levels, while those of Swiggy are down 32% from their post-listing high of ₹617.
