Eternal continues to hold a commanding lead over Swiggy across India's food delivery and quick commerce businesses, but the competitive gap is beginning to narrow in profitability, according to a new comparative study by Jefferies. The brokerage compared the two companies across the past nine quarters and concluded that Eternal has strengthened its leadership through superior execution, larger scale and better unit economics.
It said the company has expanded its lead in food delivery, while its quick commerce business, Blinkit, continues to dominate on metrics such as dark store footprint, monthly transacting users, order volumes and gross order value.
According to Jefferies, Eternal now accounts for 74% of quick commerce gross order value, compared with 26% for Swiggy, while Blinkit operates 68% of the sector's dark stores versus 32% for Instamart. The brokerage said Blinkit's scale advantage has translated into better profitability, making Eternal the clear leader across most operating metrics.
However, Jefferies noted that Swiggy's food delivery EBITDA has grown five-fold over the past year, compared with a two-fold increase for Eternal, suggesting that the company is closing the profitability gap even as it trails on scale.
The brokerage believes this improvement could become a meaningful catalyst if replicated in quick commerce, where Instamart recently achieved contribution margin break-even. If execution continues, Swiggy could emerge as a high-risk, high-reward investment, offering significant upside from improving operating leverage despite remaining behind Eternal in market share.
Even so, Jefferies continues to favour Eternal as its preferred play on India's internet and consumption story. The brokerage described the company as a "must-own" stock for long-only portfolios, citing its leadership position, stronger execution and superior unit economics.
While Eternal's larger scale and profitability continue to justify its premium valuation, Jefferies believes the competitive dynamics are becoming more interesting. The brokerage said Swiggy appears more innovative across several initiatives, and if it can sustain its profitability trajectory alongside disciplined growth in Instamart, the valuation gap between the two companies could begin to narrow over time.
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