Zomato and Swiggy Achieve New Stock Market Milestones
Food and grocery delivery platforms Zomato and Swiggy shares have skyrocketed after following reports from CLSA, a brokerage firm. On December 5, Zomato stock price reached a record high, which can be considered a confirmation of the stock market’s successful business development strategy.
Recently, brokerage firm CLSA has retained an ‘outperform’ rating on Zomato and has raised its target price to Rs 370 per share. This change indicates more than 32 percent appreciation from its last trading price of Rs 280 on the National Stock Exchange.
Similarly, Bernstein has confined Zomato to ‘outperform’ the target share price of Rs 335, emphasizing that it has a more extensive base than Swiggy. Swiggy has frequent users compared to Zomato, with more restaurants with a gross order value per restaurant, which matters in the food delivery business.
Swiggy’s Growth and Profitability Outlook
Swiggy outperformed by a 9% rise to reach Rs 567.55 share prices, which is imperative to its business outlook. This rise came after the company released its second-quarter earnings result, showing that it only reported a reduced net loss and an impressive year-over-year growth in its B2C gross order value (GOV). However, the significant growth has been seen in Swiggy’s quick commerce arm, Instamart, which has registered 76% growth in GOV YoY but still lags behind Zomato’s Blinkit, which reported 122% growth.
Motilal Oswal has addressed the nature of Swiggy’s position in the “steady duopoly” of food delivery in India by explaining the fluctuations in the market share will not alter valuations unless a severe change in growth trends occurs. Moreover, Swiggy can hit positive core earnings by December 2025 due to the rapid expansion of Instamart.
Market Outlook and Competitive Dynamics
Zomato and Swiggy remain innovative and ambitious in their growth. This has led to rivalry in the food delivery and quick commerce categories increasing rapidly. Jefferies turned the focus to the apparent inability to sustain high levels of profitability and aggressive discounting strategies employed by innovative players like Amazon Tez.
However, new entrants and shifts in consumer trends are putting pressure on the entire value chain to offer additional and better services, including faster delivery times. This may affect modern and general trading as quick commerce platforms provide more utility and customer solutions.
