| Company | Value | Change | %Change |
|---|
A comparative analysis of their recent performance highlights key differences in growth, profitability, strategic direction, and stock performance.
| COMPARISON | Swiggy | Zomato |
| B2C GOV | +38% | +57% |
| Food Delivery | +19.2% | +17% |
| Quick Commerce | +88.1% | +120% |
Swiggy reported its December quarter results after market hours on February 5, in which its net loss and EBITDA widened from last year.
Revenue for the Quick Commerce business more than doubled from last year, but the unit remained loss making.
Swiggy’s management after Q3
Swiggy’s management has laid out a clear roadmap for sustainable growth—- Food delivery GOV target at 18-22% in the medium term.
– Food delivery adjusted margin target at 5% in medium term.
– Maintains guidance of contribution margin break-even by Q3 of FY26.
Zomato after Q3
Zomato, on the other hand, faces some short-term challenges but remains optimistic.
– Blinkit losses to continue in the near term- Food delivery revenue growth slowed due to weak consumer sentiment
– Food delivery EBITDA margins can cross and sustain above 5% in the next few quarters
– Heightened quick commerce competition has led to a temporary pause in margin expansion.
Swiggy vs Zomato: Stock performance, valuation
Shares of Swiggy have faced setbacks, declining 13% since Zomato’s Q3 results and 32% from its peak. In terms of valuation, Swiggy is currently at a 50% discount, compared to Zomato, down from a 35% discount at its peak.
Q3 cash balance
Swiggy: ₹19,235 crore
Zomato: ₹8,183 crore
Global brokerage firm Macquarie has an ‘Underperform’ rating on Swiggy, with a price target of ₹325 per share.
The brokerage said that it sees challenged economics in the Quick Commerce segment, slower growth in the food delivery business along with stretched valuations.
For platform-oriented stocks, Macquarie continues to prefer Zomato over Swiggy.
Shares of Zomato Ltd. was trading with gains of 2%, while Swiggy shares fell 4% on Thursday, February 6.
