Eternal shares have gained around 2% in one week and around 9% in one month. In the longer term, the stock delivered 339% returns over three years. The company currently has a market capitalisation of nearly Rs 2.28 lakh crore.
On the other hand, Swiggy shares declined more than 2% in one week, and nearly 6% in one month. The stock dropped 20% in one year. The company’s market capitalisation stands at over Rs 73,300 crore.
Macro backdrop
The current macro backdrop—rising geopolitical tensions, sticky inflation concerns, and increasing chatter around AI-led job disruptions—poses a risk to discretionary consumption, said Harshal Dasani, Business Head, INVasset PMS. In such an environment, platform businesses dependent on high-frequency consumer spending are likely to see moderation in order growth and average ticket sizes, the analyst explained.
While the sector’s long-term growth remains structural, driven by digital adoption and convenience, the near-term landscape has shifted, said Uttam Kumar Srimal, Senior Research Analyst, Axis Securities. He added that investors are now prioritizing profitability and cash flow over pure-play growth.
Eternal vs Swiggy: What is the key difference?
Between Swiggy and Eternal, the key differentiator lies in business resilience and diversification, according to Dasani. “Swiggy remains more consumption-heavy, with food delivery and quick commerce being directly exposed to urban discretionary demand cycles, which tend to be the first to slow when inflation pressures rise. Eternal, on the other hand, offers relatively better insulation due to a more diversified model and stronger operating leverage visibility. Its ability to drive efficiencies, improve margins, and monetise across segments provides a cushion even if topline growth moderates,” he explained.
Eternal vs Swiggy: Q4 expectations
Sunny Agrawal, Head of Fundamental Research at SBI Securities, said that he expects both Swiggy and Eternal to report healthy GOV and NOV growth in the fourth quarter of FY26 for food delivery as well as quick commerce business. Food delivery business should continue to grow at 15-20%, and an increase in platform fees should partially offset the impact of trimmed menu offerings due to the curtailed supply of cooking gas at the restaurant level, he said.
Quick commerce businesses have witnessed heightened competitive intensity from the new players. However, quick commerce TAM is humungous, and incumbents like Swiggy and Eternal should continue to report robust growth, in the backdrop of rapid dark store expansion, Agrawal said. “Shift from marketplace to inventory-led model further offers margin levers and hence both the companies should be able to adhere to their guided path to profitability in the quick commerce business. Post correction, investors can add both the names in the portfolio with Eternal being the relatively preferred bet,” he added.
UBS, in a recent note, highlighted that the near-term quick commerce competition remains intense, as new entrants like Amazon and Flipkart may lead to growth moderating. Food delivery is likely to remain stable, although investors must keep an eye on any LPG supply constraints.
Eternal vs Swiggy: Which stock to buy?
UBS this month cut its target prices for Eternal and Swiggy to Rs 310 apiece and Rs 390 apiece, respectively, while maintaining its ‘Buy’ rating for the two stocks. The target prices imply an upside potential of more than 31% for Eternal and nearly 48% for Swiggy from current levels.
JM Financial, however, recently downgraded Swiggy shares to ‘Reduce’ and lowered its target price to Rs 270 apiece, implying a mere 2% upside potential from the previous closing price. “Swiggy Instamart is mired in a growth-versus-profitability deadlock due to a fixation on meeting contribution margin guidance, thereby stunting the scale-up required for long-term viability. Despite a fortified balance sheet following the recent fundraise, management’s apparent reluctance to compete full-on is racking up market share loss. In fact, we fear this strategy, if not recalibrated, would put the business in an orbit of irrelevance soon, particularly as traditional e- commerce incumbents accelerate their QC expansion. Therefore, any near-term narrowing of absolute losses should be seen as a temporary patch-up rather than a sustainable structural gain,” it said.
“Given no clear visibility of a credible turnaround, we argue Instamart with its current strategy will only destruct value for Swiggy shareholders, even if its food delivery (FD) segment surprises positively. Under these circumstances, the best possible outcome for investors in our view is to hope that a larger player acquires Swiggy. Till any telltale signs to this effect emerge, we recommend investors avoid the stock,” it added.
Goldman Sachs, meanwhile, holds a ‘Buy’ call for Eternal with a target price of Rs 350 apiece (48% upside). BofA Global Research has a target price of Rs 320 apiece (35% upside) for Eternal and Rs 360 apiece (36% upside) for Swiggy.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)