Swiggy Vs Zomato: What Should You Bet On Amid GST Cuts? Five Key Triggers To Watch

Swiggy Vs Zomato: Growth recovery in India's food delivery market is expected to be gradual. However, momentum in the quick-commerce segment will likely remain robust with the next-generation GST reforms widely expected to spur consumption and boost India's economic growth.

According to global brokerage, Bank of America (BofA), the quick commerce segment will be one of the key beneficiaries of GST rate cuts with Blinkit being 'best placed' among the top names. Festive season demand, combined with the GST cuts, will push quick commerce players to adopt discount strategies and target higher sales to attract more buyers.

The big question for D-Street watchers is whether they should bet on Swiggy or Zomato amid the GST 2.0-led boost and ahead of the Q2 FY26 quarter results. In its latest note, BofA has given five key triggers to watch out for before making an investment decision:

1. Quick commerce competition low: Blinkit, Instamart to benefit

Competitive intensity in the quick commerce market has come down in the last 3-4 months. Both Instamart and Zepto are focusing on improving EBITDA. New platforms offer limited differentiation and are not aggressive on the ground. "User demand remains strong and hence we expect strong NMV/GMV momentum for Blinkit and Instamart in the near-term," said BofA.

"We find Blinkit's execution on the ground to be the best and expect them to continue to gain market share going ahead (est. 50%+). Even transition to an inventory model should help them improve their margins. Between growth and margins, we expect it to focus on growth," added BofA.

2. KPIs of quick-commerce majors

Brokerages expect key performance indicators to diverge between Blinkit and Instamart going ahead. As Instamart is focusing on Maxx Saver, BofA expects its average order value uptake to be stronger, but order growth to be lower. "Our channel checks indicate that discounting at Instamart is higher compared to Blinkit. Hence, we don't expect material reduction in losses at Instamart level; the loss reduction would likely be gradual going ahead," it said.

3. Dark store additions: Blinkit adds strong, others slowing

On the ground channel checks indicate that only Blinkit is adding more dark stores and appears on track to add 2,000 dark stores by the end of this year. Both Swiggy and Zepto have slowed down dark store additions. Newer quick-commerce platforms like Amazon, Flipkart and BigBasket are also not aggressive in terms of adding stores.

"We believe that the strong dark store footprint will give Blinkit a competitive advantage as it could leverage its scale to negotiate with brands, earn better ad revenues and continue to increase its market share in the quick-commerce space," said BofA.

4. Food delivery: Gradual recovery in growth, margins

While near-term food delivery growth appears better than last quarter, growth still remains below 20% year-on-year. Analysts don't consider new entrant Rapido a threat yet, as it is not offering anything differentiated so far and doesn't have scale.

"While competition among the top two platforms remains stable, we would not rule out some heightened intensity as Zomato looks to grow faster. As overall consumption recovers, we expect the food delivery growth to increase to 20% YoY although margin improvement may be gradual," said BofA.

5. Valuation and estimates

Due to better momentum at quick commerce, BofA raised its estimates for Eternal (Zomato post the recent rebranding) and Swiggy. "Given recovery in food growth and peer multiple re-rating, in the SOTP part of valuation, we raise FY27 food-delivery EBITDA multiple to 38X/37X for Eternal/Swiggy (from 36X/35X) earlier," said BofA. The global brokerage reiterated its 'Buy' rating on Eternal (Zomato), given strong competitive advantage and a 'Neutral' on Swiggy, over balanced risk-reward.