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Motilal Oswal Report
Motilal Oswal Financial Services believes the recent correction in food delivery and quick‑commerce stocks has meaningfully compressed valuations, creating an attractive entry point for medium‑term investors. The brokerage noted that Eternal has corrected around 32%, while Swiggy is down nearly 50% from their respective peaks, pricing in most of the near‑term competitive concerns.
Motilal Oswal continues to view the food delivery (FD) segment as a stable duopoly, with balanced market shares between Eternal and Swiggy. It has maintained its 35x FY27E EV/Ebitda multiple for the food delivery business of both companies, reflecting steady category fundamentals.
For Eternal, the brokerage has revised its target price to Rs 340, which implies around 37x EV/Ebitda on FY28 Blinkit estimates and a potential upside of 44% from current levels. Motilal Oswal prefers Eternal for its strong execution track record and Blinkit's leadership position in the quick‑commerce segment.
For Swiggy, Motilal Oswal has set a revised target price of Rs 390, valuing its quick‑commerce business at around 0.4x FY28E EV/GMV. Despite trading at a 50–60% discount to Eternal's multiple, the brokerage believes Swiggy offers greater upside potential from current levels, given the sharper correction in its stock price.
While the brokerage has trimmed target prices to reflect heightened competition and near‑term uncertainties, it emphasised that these risks are largely priced in. Accordingly, Motilal Oswal has maintained its Buy rating on both Eternal and Swiggy, noting that the current valuation reset offers a favorable risk‑reward for investors with a medium‑term horizon.
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