Swiggy Vs Eternal: Jefferies sees 40% upside potential in one stock; calls it a high-risk, high-reward opportunity

A comparison by Jefferies shows Eternal has steadily widened its lead over Swiggy across food delivery and quick commerce over the past nine quarters through stronger execution, higher profitability and consistent market share gains. Swiggy, however, has narrowed the profitability gap in food delivery and could emerge as a higher-risk, higher-reward opportunity if it can replicate that turnaround in Instamart.

The quarter reflected those contrasting strategies. Eternal doubled down on Blinkit’s improving economics while continuing to expand aggressively, whereas Swiggy chose to reinvest after bringing Instamart close to contribution margin breakeven, signalling that growth now takes precedence over protecting near-term margins.

Swiggy vs Zomato: Food delivery widens the gap

Jefferies believes Eternal continues to lead India’s food delivery market on almost every operating metric. The brokerage estimates Eternal’s food delivery market share increased to more than 58% in Q1 FY27, while the company also overtook Swiggy on take rates over the past two quarters after previously trailing its rival. Eternal also maintained around 1.4 times Swiggy’s monthly transacting users and accounted for roughly 67% of the segment’s Adjusted EBITDA, compared with 33% for Swiggy.

Even so, the brokerage noted that Swiggy has made significant progress in profitability. Over the past nine quarters, Swiggy’s food delivery Adjusted EBITDA has increased five-fold, compared with roughly a two-fold increase for Eternal, suggesting the profitability gap has narrowed even as Eternal retained its leadership.

The quarterly results reflected a similar trend.

Swiggy’s food delivery Gross Order Value (GOV) increased 17.4% year-on-year to Rs 9,490 crore in Q1 FY27 from Rs 8,083 crore in Q1 FY26. Adjusted EBITDA rose to Rs 292 crore from Rs 192 crore, while the Adjusted EBITDA margin stood at 3.1% of GOV. Monthly transacting users increased to 19.2 million, and the company retained its 18% to 20% medium-term growth guidance. Rohit Kapoor, Chief Executive Officer, Food Marketplace, Swiggy, said “Food delivery remains still quite under-penetrated in India,” reaffirming confidence in long-term demand.

Table 1: Food delivery at a glance (place after “Food delivery widens the gap”)

Source: Company filings, Jefferies

Eternal’s food delivery NOV increased 20.1% year-on-year to Rs 10,770 crore, while Adjusted EBITDA rose to Rs 606 crore from Rs 451 crore a year earlier. Adjusted EBITDA margin improved to 5.6% of NOV from 5.4% in the previous quarter. Akshant Goyal, Chief Financial Officer, Eternal, said “Most of the growth comes from frequency growth,” indicating that existing customers continue to order more often rather than merely spend more per order.

Swiggy vs Zomato: Quick commerce diverges

The contrast is even sharper in quick commerce, where Jefferies believes Blinkit has widened its lead across scale, profitability and customer engagement.

According to the brokerage, Blinkit now accounts for about 75% of the combined quick commerce NOV, compared with 25% for Instamart. Blinkit also commands larger shares of dark stores, monthly transacting users and order volumes, delivering almost 2.9 times as many orders as Instamart. However, Jefferies noted that Swiggy has almost eliminated the gap in average order value, suggesting that execution rather than basket size now explains most of the performance difference.

Blinkit’s new order value increased 86.2% year-on-year while its network expanded to 2,443 dark stores after adding 200 stores during the quarter. Adjusted EBITDA improved to Rs 102 crore, prompting Eternal to indicate that Blinkit is now likely to finish at the upper end of its earlier 5% to 6% steady-state Adjusted EBITDA margin guidance. Akshant Goyal said the company now had “higher visibility on margins,” reflecting improving operating leverage.

Swiggy’s Instamart reported38.9% year-on-year increase in new order value, while the contribution margin improved to -0.3% from -2.5% in the previous quarter. Adjusted EBITDA loss narrowed to Rs 778 crore from Rs 858 crore. Rather than preserving those gains, Swiggy said it would operate within a 0% to -1% contribution margin range as it accelerates expansion. Sriharsha Majety, Managing Director and Group Chief Executive Officer, Swiggy, said the company had “earned the right and the flexibility” to reinvest after reaching contribution margin milestones.

Swiggy vs Zomato: Competition shapes the next phase

Beyond quarterly numbers, the earnings calls suggested the competitive landscape is beginning to stabilise even as both companies continue to invest aggressively in quick commerce.

Jefferies said Eternal’s leadership has been built on execution rather than aggressive discounting. The brokerage noted that management appeared comfortable if competitors temporarily grew faster through sustained cash burn, arguing that stronger customer retention and improving unit economics matter more than short-term market share gains. It also highlighted that customer cohorts acquired three years ago now spend nearly three times what they did when they first joined the platform, indicating deeper engagement over time.

Echoing that view, Albinder Singh Dhindsa, Chief Executive Officer, Eternal, said “Competitive intensity remains high but has become more predictable,” adding that significantly deeper discounting would materially increase industry losses.

Swiggy, meanwhile, maintained that sustainable economics would ultimately determine market leadership. Rohit Kapoor, Chief Executive Officer, Food Marketplace, Swiggy, said “If it is zero commission, then who pays for the cost of the platform?” while Sriharsha Majety, Managing Director and Group Chief Executive Officer, Swiggy, added that “Everyone has their own strategies. We have our own.”

Swiggy vs Zomato: Growth remains the priority

Both companies retained their broader growth outlook, although they are pursuing different paths to improve profitability.

Blinkit’s NOV increased 19% quarter on quarter supported by higher monthly transacting users, increased order volumes and continued investments in assortment, geographical expansion and supply infrastructure. Akshant Goyal, Chief Financial Officer, Eternal, said the company has “higher visibility on margins,” reflecting improving store economics.

Swiggy retained its 18% to 20% medium-term food delivery growth guidance but indicated that Instamart would operate within a 0% to -1% contribution margin range over the coming quarters as it accelerates investments. The company plans to step up dark-store additions across existing cities rather than expand into new markets. Rahul Bothra, Group Chief Financial Officer, Swiggy, said “We are going to open in the same cities,” adding that several stores are already handling 2,500 to 3,000 orders a day, creating the need for additional capacity.

Jefferies said the contrasting strategies reflect each company’s position in the market. Eternal continues to widen its lead across quick commerce on scale, profitability and market share, while Swiggy has narrowed the profitability gap in food delivery and could see a similar turnaround in Instamart if it improves execution.

Swiggy vs Zomato: Brokerages see different investment cases

Brokerages broadly agreed that Eternal continues to lead on execution, while Swiggy offers greater upside if it can replicate its food delivery turnaround in quick commerce.

Jefferies retained ‘Buy’ ratings on both Eternal and Swiggy, assigning a target price of Rs 415 to each stock. Based on the closing prices on July 30, 2026, the target implies an upside of about 33.5% for Eternal from Rs 310.80 and around 40.3% for Swiggy.

Jefferies noted that the company has significantly narrowed the profitability gap in food delivery over the past nine quarters and could see a meaningful turnaround if it replicates that playbook in Instamart. It also highlighted a sharp valuation gap, estimating Blinkit alone is worth around $14 billion, while Swiggy’s current valuation implies virtually no value for Instamart, leaving room for a significant re-rating if execution improves.

JM Financial Institutional Securities maintained a divergent view on the two companies. The brokerage downgraded Swiggy to ‘Sell’ from ‘Reduce’ while retaining a 12-month target price of Rs 250, implying a 15.5% downside from the prevailing market price. 

It said Swiggy’s decision to prioritise growth over profitability could keep Instamart’s Adjusted EBITDA losses elevated at Rs 750 crore to Rs 800 crore in the near term. The brokerage also flagged slower food delivery growth and potential overlap between Swiggy’s value offering Toing and its core food delivery business. 

In contrast, JM Financial maintained a ‘Buy’ rating on Eternal while revising its 12-month target price to Rs 400 from Rs 440, implying an upside of about 40.8% from the prevailing market price. The brokerage said Eternal’s stronger execution in food delivery, improving Blinkit profitability and better visibility on quick commerce margins continued to support its positive outlook despite ongoing investments.

Bernstein, however, remained constructive on Swiggy, highlighting the early performance of its private-label food brand Noice. While the brokerage found that Noice outperformed expectations in a blind taste test, it said Swiggy still needs to improve purchase frequency, monetise its dark-store network more effectively and execute consistently for Instamart to narrow the gap with Blinkit. Bernstein maintained an ‘Outperform’ rating on Swiggy with a target price of Rs 430, implying 71% upside.

Conclusion

The June quarter underscored that India’s food delivery market is entering a more mature phase, with the competitive focus shifting from proving profitability to scaling quick commerce sustainably. Eternal is leveraging Blinkit’s leadership to improve profitability without slowing expansion, whereas Swiggy is willing to sacrifice some near-term margins to accelerate Instamart’s growth after reaching contribution margin milestones.

Brokerage views indicate these contrasting approaches. Jefferies sees Eternal as the stronger long-term execution story and a proxy for India’s internet consumption theme, while describing Swiggy as a higher-risk, higher-reward opportunity. JM Financial remains more cautious on Swiggy’s near-term profitability, whereas Bernstein believes better execution across Instamart could unlock meaningful upside over time. 

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