Swiggy, Eternal See Higher Users Across Food Delivery, Quick Commerce; CLSA Hikes Target Price
The brokerage now sees a 28.2% upside for Eternal and 20.9% for Swiggy, driven by revised valuation multiples.
Despite a seasonal lull across consumer categories, CLSA has raised its target prices for Eternal and Swiggy, citing strong year-to-date user growth and improving long-term penetration potential. The brokerage now sees a 28% upside for Eternal and 21% for Swiggy, driven by revised valuation multiples and encouraging user metrics across food delivery and quick commerce platforms.
Eternal's target price has been increased to Rs 417 from Rs 385, and for Swiggy, the new price is Rs 509, up from Rs 473, with an outperform rating maintained on both stocks.
“We now value Eternal’s food delivery business at a 15% premium to Jubilant’s long-term forward multiple of 58 times, compared to a 15% discount earlier,” the brokerage said. For Swiggy, the valuation bump is driven by “an increase in the implied multiple based on Eternal’s relative valuation.”
The update comes amid a monsoon-induced slowdown in weekly active users (WAU) across several platforms.
CLSA noted, "Blinkit and Zepto saw slight declines in WAU week-on-week, while DMart Ready hit a new high of 2.1 million active users."
Zepto’s user base fell by 2.6 million to 41.8 million, while Blinkit dropped 1.4 million to 41.1 million for the week ending August 11. "The gap between Zepto and Blinkit narrowed to just 0.7 million users from 2 million the previous week."
On a year-to-date basis, Blinkit added 18.4 million users, Zepto 5.4 million, and Swiggy Instamart 10.5 million, indicating robust growth despite short-term volatility. In the beauty segment, Nykaa led with 2.28 million new users, while Purplle and Tira remained flat.
