and
Zomato found themselves on investor menus in Q4 with retail and HNI investors taking big bites out of both companies.Swiggy, in particular, saw strong appetite from both camps—it was the fourth most-bought stock by retail investors, with a net addition of 2.95 crore shares, translating into a purchase worth Rs 1,148 crore, even though the stock tumbled nearly 39% during the quarter. Among high-net-worth individuals, it ranked second, with HNIs scooping up 1.95 crore shares worth Rs 760 crore, according to data from PRIME Database.
Zomato—listed under the name
Eternal Ltd.—wasn’t far behind. Retail investors added 3.41 crore shares, spending Rs 762 crore, making it the eighth-most bought stock by retail hands. HNIs joined the party too, buying over 1.1 crore shares for nearly Rs 248 crore, despite a 27.5% plunge in the stock’s price during the period.
Part of the answer lies in familiarity and visibility—consumers are often users of both services, making the leap to shareholders a natural next step. But beyond the Lynch-ian logic, some investors are simply betting that the worst may be behind.
The Q4 earnings season for Blinkit and Swiggy Instamart came in with few surprises, according to HSBC. Growth was strong at 20% quarter-on-quarter for both. But the surge in sales was matched, and in Swiggy's case, outpaced by a spike in losses.For every Rs 100 of Gross Order Value (GOV), Blinkit bled Rs 2. Swiggy Instamart, by comparison, was a geyser, losing Rs 18. HSBC noted that Swiggy's cash burn was even more intense than its profit erosion—a worrying sign in a capital-thirsty business.While the current competitive landscape offers a temporary reprieve to both players, HSBC warns that the battlefield could get crowded again in the second half of 2025 and into 2026. That means investors hoping for near-term profitability might need to hold their breath for another 12 months. Until then, the focus must shift to defending market share—even if margins take a backseat.
If Blinkit could maintain its market share, stock is unlikely to correct much as well, HSBC noted, adding that the next few quarters could see both firms trying to wring more out of their new stores, hinging heavily on how well they retain recently acquired customers.
Swiggy’s QC business, HSBC adds, is currently trading at a 60% discount to Eternal's Blinkit. Despite this, the brokerage prefers Eternal, citing cash burn concerns and competitive pressure at Swiggy. HSBC has trimmed its QC margin forecasts for both, slashing Swiggy’s target price to Rs 350 from Rs 385. For Eternal, it maintains a Buy with a target price of Rs 280.
Even Swiggy’s now expects to hit contribution break-even in 3–5 quarters, a delay from its earlier December 2025 target.
As a result, Jefferies has shaved its target price on Swiggy from Rs 400 to Rs 380, citing a higher-than-expected EBITDA loss outlook for FY26–27. The brokerage flagged that persistently high competitive intensity will not only keep margins under pressure but also inject fresh volatility into short-term performance.
For Zomato, the Q4 earnings season brought a wave of downgrades, with JM Financial reporting the sharpest EPS cut among Nifty companies of around 15% for Eternal. That’s largely due to rising competitive intensity in the quick commerce (QC) space and weakness in the “Going-out” segment, where margin expansion is now expected to be far more measured.
Profitability, once a promised land in the near horizon, now seems a bit further away.
Morgan Stanley, once a cheerleader, has trimmed its price target on Zomato to Rs 320, citing reduced valuations in both food delivery and QC. J.P. Morgan has slashed its target too, from Rs 340 to Rs 290.
Eternal shares ended Monday's session 6% higher at Rs 240 while Swiggy also rallied over 2% to end at Rs 320.5. For now, investors are ordering both. The real question is, which one delivers better returns?
(: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
