Eternal shares rise 2% after HSBC raises target, keeps Swiggy at 'Hold'

Analysts believe that even though Swiggy has outperformed Zomato on both monthly transaction users (MTU) and gross order value (GOV) growth in the past one year, Zomato's margin is still significantly

HSBC Global Investment Research has raised its target price on Eternal stock, parent of Zomato, to ₹390 per share from ₹340 earlier, citing that overall, Eternal (Blinkit) still maintains its significant lead both in terms of growth and profitability in Quick Commerce (QC) over Swiggy (InstaMart). The brokerage has ‘Hold’ on Swiggy shares with an unchanged target of ₹430 per share.

 

At 10:26 AM, Eternal share price was trading 2.18 per cent higher at ₹328.05 per share, and Swiggy’s share price was trading 0.68 per cent lower at ₹418 per share. In comparison, BSE Sensex was up 0.5 per cent at 80,826.35. 

Zomato vs Swiggy: HSBC view 

Zomato’s margin still higher than Swiggy 

Analysts believe that even though Swiggy has outperformed Zomato on both monthly transaction users (MTU) and gross order value (GOV) growth in the past one year, along with reducing margin differential, Zomato’s margin is still significantly higher. 

 

 

Swiggy’s MTU and GOV growth over the last year has been 16 per cent and 19 per cent, as against Zomato’s 13 per cent and 16 per cent, respectively. On the margin front, over the last 12 months, Swiggy’s Earnings before interest, tax, depreciation and amortisation (Ebitda) margins have expanded by 160 basis points (bps), on the back of both contribution margin (CM) and fixed cost leverage, as compared to 80 bps for Zomato.

 

However, Zomato’s margins are significantly higher at 4.2 per cent, as compared to Swiggy’s 2.4 per cent. Also, Zomato is now reinvesting in its food delivery business, which may constrain Swiggy’s near-term margin expansion. For example, three-month memberships for both “Zomato Gold” and “Swiggy One” are now available for just ₹1.  ALSO READ | Vishal Mega Mart gets new 'buy' from JM Financial; stock to see 21% upside

Blinkit widens lead over Swiggy Instamart in quick commerce

Blinkit has extended its dominance in the quick commerce (QC) space, with rival Instamart’s net order value (NOV) now only 45 per cent of Blinkit’s in Q1FY26, down from 60 per cent a year ago. Blinkit’s NOV grew 125 per cent year-on-year (Y-o-Y), as against 75 per cent for Instamart. While Instamart has improved its average order value (AOV), driven by the success of “Maxxsaver,” Swiggy’s margins continue to lag Blinkit’s by 700–800 bps.

 

Analysts believe Swiggy must improve store-level throughput, commissions, and balance customer acquisition costs (CAC) with discounts under Maxxsaver to narrow the margin gap. On a positive note, incremental order-per-store growth will benefit Swiggy more, given its lower base.

Balance sheet strength is critical: 

Blinkit has a cash surplus of $2.2 billion, while Swiggy’s reserves fell to $620 million in Q1FY26, with further depletion expected post-Q2. Swiggy’s $270 million stake sale in Rapido provides a runway, but significant execution improvements are imperative.