The share price of Eternal and the Swiggy share price are surging in trade today after Motilal Oswal placed a fresh bet on India’s food-tech story. It has upgraded Swiggy to ‘Buy’ and also reiterated its ‘Buy’ recommendation on Eternal (Zomato). The leading brokerage firm believes that after months of weak demand, sharp discounting, and strained profitability, the cycle is finally turning.
With GST reforms, festive tailwinds, and easing competition in quick commerce, Motilal Oswal sees both platforms well-positioned for a strong growth rebound and has raised its growth estimates and target prices accordingly.
Let’s take a look at what the brokerage has to say on these stocks-
Motilal Oswal on Swiggy: Upgrade to Buy with 32% upside prediction
The brokerage firm Motilal Oswal has turned bullish on Swiggy. The brokerage has given a “Buy” rating with a target price of Rs 560. This indicates a potential upside of 32% from current levels.
The brokerage pointed out that Swiggy’s food delivery growth, which had slowed to 17-18% in recent quarters, is likely to rebound.
“We believe FD growth, which was stunted at 17-18%, could accelerate beyond 20% in the next 2-4 quarters, driven by the upcoming festive season, as well as a spur from the recent GST reforms,” added the brokerage in its report.
On the quick commerce side, Swiggy’s Instamart business is also expected to benefit from easing competition. As per the report, “Rational competition: We believe discounting intensity will ease going forward, supported by measured aggression by new entrants as well as incumbents,” added the report.
The brokerage expects this moderation, coupled with slower dark store expansion, to improve margins significantly.
Motilal Oswal on Eternal (Zomato): Retains Buy, sees 29% upside
Eternal (formerly Zomato), continues to hold a strong position in both food delivery and quick commerce through Blinkit. Motilal Oswal has retained its “Buy” rating on the stock with a target price of Rs 420. This implies an upside of 29%.
The brokerage highlighted that Zomato’s GMV growth could accelerate as discretionary spending rebounds. “Discretionary spending could rebound, supported by GST reforms that leave more disposable income in the consumer’s hands. As confidence returns, both dining-out and at-home delivery should accelerate too,” added the report.
Blinkit, its quick commerce arm, is seen as a structural growth driver. “We bring forward our profitability assumptions for Instamart and Blinkit, as easing competitive intensity, moderating dark store expansion, and declining customer acquisition costs have accelerated the path to breakeven,” the report noted.
Motilal Oswal on Swiggy, Zomato: What it means for investors
Motilal Oswal has raised its food delivery growth estimates for both companies to 21-23% for FY26-27 (from 19-20% earlier) and bumped up valuations to 35x FY27E adjusted EBITDA. The brokerage believes that the cycle of weak consumption and margin pressure is ending, making room for a more sustainable growth trajectory.