Explained: How will implementation of the CoSS impact Swiggy, Eternal?

The Government of India has notified the implementation of the Code on Social Security (CoSS) with effect from November 21, 2025. Under the Code, platform aggregators such as Eternal (Zomato) and Swiggy are required to contribute 1–2 per cent of their annual turnover to a social security fund for gig workers, subject to a cap of 5 per cent of the amount payable to gig workers.

 

At 10:19 AM, Eternal shares were trading 0.36 per cent lower at ₹300.95 per share, while Swiggy stock was up 1.05 per cent at ₹389.7 on the BSE. In comparison, the BSE Sensex was 0.13 per cent higher at 85,343.66.

 

According to JM Financial Institutional Securities, in a worst-case scenario, the amount payable by Eternal and Swiggy towards the fund would work out to around ₹2.1–2.5 per order for their respective food delivery and quick commerce businesses.

 

In percentage terms, the brokerage estimates the impact at 0.60–0.65 per cent of adjusted Ebitda (as a percentage of net order value) for food delivery, and 0.40–0.45 per cent of net average order value (NAOV) for quick commerce.

 

On a consolidated FY26 basis, JM Financial expects Eternal and Swiggy to contribute ₹43 crore and ₹26 crore, respectively, to the fund. Given that both companies are still some distance away from their own sustainable profitability targets, JM Financial believes they are likely to pass on most of the additional cost to customers, rather than absorb it.  ALSO READ | Mangal Electrical shares slip 2% as anchor lock-in ends; details here 

However, the brokerage does not expect a material change in customer ordering behaviour even if hyperlocal platforms choose to pass on the social security-related charges. This view is based on the recent experience of users absorbing other platform-level charges.

 

“Our assumption is based on the recent absorption of other fees being charged by these companies, such as platform fees (₹15 per order in food delivery) and handling, packaging, small order or surge fees that together add up to ₹20 per order,” JM Financial noted.

 

The brokerage has a ‘Buy’ rating on Eternal with a target price of ₹450 per share, and an ‘Add’ rating on Swiggy with a target of ₹460 per share. Analysts at JM Financial said they will wait for more clarity from both the government and the aggregators before revisiting their estimates, and cautioned that during this period of uncertainty, both stocks could see heightened volatility. (Disclaimer: The views and investment tips expressed by JM Financial Institutional Securities in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)