Nirmal Bang initiates 'Buy' on Swiggy and Eternal; sees up to 26% upside

Domestic brokerage Nirmal Bang has initiated coverage on Eternal and Swiggy with a 'Buy' rating; check target price here

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Shares of food delivery aggregators Eternal (parent of Zomato) and Swiggy were in demand on Tuesday, July 22, 2025. On the BSE, Eternal's shares rose 14.8 per cent, hitting an all-time high of ₹311.6 per share. Similarly, Swiggy’s share price climbed 7.8 per cent, recording an intraday high of ₹426.35 per share.

 

At 9:52 AM, Eternal share price was trading 10.56 per cent higher at ₹299.85 per share, and Swiggy was up 4.8 per cent at ₹414.5 on BSE. In comparison, the BSE Sensex rose 0.23 per cent at 82,391.02. 

Why were Swiggy and Zomato shares buzzing in trade? 

Eternal shares were in demand after the company posted its Q1FY26 numbers. Post the Q1 results, brokerages made an upward revision in the target, which boosted rally in the stock. READ MORE 

 

Apart from that, domestic brokerage Nirmal Bang initiated coverage on Eternal and Swiggy with a 'Buy' rating. The brokerage has a target of ₹500 per share on Swiggy and ₹315 on Eternal. 

 

Convenience-led food consumption and the quick commerce segment are flourishing even though private consumption growth is facing underlying challenges, according to the brokerage. 

 

According to Kantar, a marketing data and analytics company, overall fast-moving consumer goods (FMCG) growth slowed to 4.2 per cent in FY25 from 6.6 per cent in FY24, with urban FMCG growth moderating to 4.4 per cent, down from 7.6 per cent last year) and rural growth easing to 4 per cent from 5.8 per cent. 

 

However, Eternal’s food delivery business revenue, in the same period, grew 27 per cent and Swiggy’s by 23 per cent in FY25, while Blinkit’s quick commerce segment surged 126 per cent and Swiggy’s Instamart by 118 per cent.

 

Indian online food delivery and quick commerce markets have emerged as rare and powerful engines of growth, driven by digital adoption, convenience-first consumer behavior, and platform-led innovation.

 

The online food delivery market, valued at approximately ₹63,000 crore (US$7.3 billion) in 2023, is projected to nearly triple to ₹14-17 trillion (US$17-21 billion) by 2028, registering a compound annual growth rate  (CAGR) of 17-22 per cent. 

 

At the same time, India’s quick commerce market—offering ultra-fast delivery of daily essentials—is expected to witness explosive growth, expanding from ₹22,400 crore (US$2.8bn) in 2023 to ₹2.3-4.2 trillion (US$29-53 billion) by 2028 at a CAGR of 60-80 per cent with nearterm annual growth projected at 80-100 per cent.

 

Individually, Nirmal Bang expects Swiggy's adjusted Earnings before interest, tax, depreciation and amortisation (Ebitda) as percentage of gross order value (GOV) in out-of-home consumption it to exceed 1.5 per cent by FY27E, supported by growing ad revenues, although the company’s guided range stands at 4-5 per cent over the medium-to-long term.

 

In Eternal's case, the brokerage anticipates food delivery adjusted Ebitda as percentage of GOV to expand to 5.1 per cent by FY27E, driven by better logistics, ad monetisation, and assortment. In quick commerce, Blinkit remains the leader with nearly two times GOV of Instamart in FY25 and a premium average order value (AOV) of ₹667 against ₹514 of Instamart. GOV is expected to clock 72 per cent CAGR over FY25-FY27E, led by strong growth in order volumes.

 

Further, with Hyperpure and the going-out business continuing to be in the investment zone, these two segments are valued on EV/GOV and EV/Sales on FY27E.