Swiggy Upgraded To Buy By Motilal Oswal, Maintains Buy On Eternal; Sees Structural Tailwinds To Drive Growth

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Motilal Oswal Report

We raise our food delivery growth estimates for both Zomato and Swiggy to 21-23% for FY26-27 (vs. 19-20% earlier). To capture this stronger growth outlook, we now value FD businesses at 35x FY27E adjusted Ebitda, compared to 27x earlier, reflecting not only faster top-line recovery but also improved visibility on profitability.

On the quick commerce side, 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. We expect contribution margins to recover meaningfully over the next few quarters.

The revisions lead to upgraded target prices for both Swiggy and Eternal.

We upgrade Swiggy to Buy with a target price of Rs 560 (implying 32% upside), reflecting the inflection in FD growth and improved unit economics in QC.

We retain our Buy rating on Eternal with a target price of Rs 420 (implying 29% upside), as we continue to see structural tailwinds and upside to earnings estimates for the company.

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