Stocks to buy: Swiggy and Eternal (formerly known as Zomato), the country’s two leading food delivery companies, have announced their March quarter results (Q4FY25). Both companies’ profitability was hit by rising expenses in the quick commerce segment, where they are focused on accelerating store count, offering discounts, and subsidising delivery in a bid to gain market share amid rising competition.
Aggressive store expansion has led both companies to burn more cash, impacting their bottom line. Additionally, the food delivery business has slowed in recent months due to a sluggish demand environment and competition from quick commerce itself, which delivers packaged meals.
Profitability pressures mount for both players
During the quarter, Eternal—which officially changed its name from Zomato in March—added 294 stores, marking its highest-ever net store additions (compared to 216 and 152 stores in 3Q and 2Q, respectively), bringing the total store count to 1,301.
The management reiterated its guidance of 2,000 active stores by the end of CY25, with a large portion of the new additions expected in lower-tier cities. Swiggy, its nearest rival, added 316 stores in the March quarter—more than the total number of stores added over the previous eight quarters combined.
According to the company, 33% of the 412 new dark stores added in 2HFY25 were opened in 80 new cities, while the remaining stores were established in existing metro and Tier-1 cities. Going forward, the company expects to significantly increase its dark store count in the cities where it already operates.
However, despite this aggressive expansion, Swiggy’s Instamart posted a weaker-than-expected performance in 4Q. GOV grew 19.5% QoQ (+101% YoY) to ₹46.7 billion. Business growth was meaningfully slower than Blinkit, which reported ~134% YoY growth, despite already being twice the size.
Blinkit’s Gross Order Value (GOV) grew a robust 134% YoY and 21% QoQ to ₹94.2 billion. This strong growth was primarily driven by a 117% YoY increase in order volumes (up 28.5% QoQ), which was supported by a sharp rise in Monthly Transacting Users (MTUs)—reaching 13.7 million, up from 10.6 million in 3QFY25 and 6.4 million in 4QFY24.
Instamart, too, benefited from a 21% QoQ growth in orders (+77% YoY), led by an MTU increase to 9.8 million, compared to 7.0 million in 3QFY25 and 4.7 million in 4QFY24. Nevertheless, Blinkit is ahead of Instamart in terms of overall growth momentum.
Despite strong momentum in the quick commerce segment, Eternal reported a 78% drop in Q4 profit to ₹31 crore, down from ₹141 crore in Q4FY24, due to significant investments in the segment. Meanwhile, ₹1,081 crore from ₹555 crore in the same period last year”>Swiggy’s losses widened to ₹1,081 crore from ₹555 crore in the same period last year, driven by rising costs and weak growth in Instamart.
Which stock looks stronger after Q4?
Maintaining a cautious view on rising competition in the quick commerce segment and factoring in weak guidance from both companies amid intensifying near-term pressures, analysts have trimmed target prices for both Swiggy and Eternal.
However, Eternal received a slight edge over Swiggy, as analysts believe Blinkit’s strong positioning will help it better withstand the competition. Domestic brokerage firm JM Financial maintained its ‘Buy’ rating on Eternal with an unchanged target price of ₹280 per share. For Swiggy, however, the firm revised its target price down to ₹450 from ₹500 while retaining its ‘Buy’ rating.
Japanese brokerage Nomura also retained its ‘Buy’ recommendation on Eternal but cut the price target to ₹280 from ₹290. Emkay Global maintained a ‘Buy’ rating on Eternal, with a March 2027 DCF-based target price of ₹290 apiece.
Jefferies adjusted Swiggy’s price target to ₹380 from ₹400, maintaining a ‘Hold’ rating. It also revised Eternal’s price target to ₹250 from ₹255, while keeping a ‘Hold’ rating.
Kotak Institutional Equities retained its ‘Buy’ rating on Swiggy with a target price of ₹415. HDFC Securities ₹400 from ₹410″>upgraded Swiggy to a ‘Buy’ from its earlier ‘Reduce’ rating and slightly lowered its target price to ₹400 from ₹410. Anand Rathi also maintained a ‘Buy’ rating on Swiggy but reduced its target price to ₹400.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
