Order now! With Zomato & Swiggy soaring, which stock should be in your portfolio?

The last six months have been rewarding for food-tech investors. Eternal surged nearly 52%, while Swiggy climbed 22%, riding on strong order growth and improving quick commerce prospects. With both companies facing a shifting macro landscape and changes in platform fees, the question now is which one is better placed to take the lead over the next one year.

Recent changes in GST rules, which impose an 18% tax on delivery fees, had initially worried investors. But analysts believe the effect will be minimal.

JM Financial notes that delivery charges are waived on nearly two-thirds of orders, while in quick commerce, Blinkit already levied GST and Swiggy’s Instamart waived most charges. Historically, both players have passed on such costs to customers.

To offset the reduction in minimum order value for subscribers, both platforms raised platform fees in recent weeks — Zomato to about Rs 14.75 per order and Swiggy to Rs 15.

While this helps margins, analysts caution that the benefit may not fully flow through to EBITDA because lower order thresholds reduce overall revenue per order.

Turning cycle in food delivery

Motilal Oswal argues that the slowdown in food delivery growth — stuck at around 17–18% — is now set to reverse. With festive demand, better consumer sentiment, and GST reforms leaving more disposable income in households, order growth could accelerate beyond 20% in the next few quarters.

“We now forecast a 23% CAGR in gross order value for FY26–28, compared to 19% earlier,” the brokerage said. Both Swiggy and Zomato are expected to benefit, but the rally may not be even.

Quick commerce: the growth driver

Quick commerce, led by Blinkit for Zomato and Instamart for Swiggy, is at the heart of the growth story. The industry has shifted from a “land-grab” phase of heavy discounting and rapid dark-store expansion to a more cost-conscious model.

Swiggy has slowed its rollout pace, focusing on sweating existing assets, while Blinkit benefits from density and scale. Analysts expect contribution margins to improve steadily as customer acquisition costs fall.

DAM Capital notes that Blink It's path to breakeven looks clearer, with operating breakeven expected by early FY27. Instamart, while improving, is still lagging but is narrowing losses. This divergence could influence investor preference in the near term.

Who has the edge?

Motilal Oswal has upgraded Swiggy to Buy with a target price of Rs 560 — a 32% upside from current levels. The call rests on accelerating food delivery growth and faster unit economics improvement in quick commerce. Meanwhile, Eternal (Zomato) retains a Buy rating with a target of Rs 420, or a 29% upside, thanks to strong Blinkit momentum and stable food delivery operations.

JM Financial is more cautious, warning that higher platform fees may not translate into the same level of margin uplift given the lower minimum order values.

Both Swiggy and Zomato are entering a new growth phase with multiple tailwinds — festive demand, easing competition, and supportive policy changes. Zomato enjoys the comfort of profitability and Blinkit’s market leadership, while Swiggy offers higher upside potential if it can deliver on margin improvements and narrow Instamart’s losses.

Abhishek Pathak of Motilal Oswal said “the perfect storm of headwinds is behind us. Both players now face multiple tailwinds.” For investors, the choice may boil down to risk appetite: Zomato for stability and scale, Swiggy for turnaround potential.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)