Synopsis: Brokerages turn bullish on Swiggy and Zomato post Q2 results, betting on strong growth from India’s booming quick commerce sector-But which stock is a better pick for the investors?
As India’s quick commerce and food delivery landscape evolves, two leading players are vying for investor attention after announcing their Q2FY26 results. Both companies have shown signs of resilience despite fierce competition and a maturing food delivery segment. However, the question remains, which stock offers the better bet going forward?
Swiggy Q2FY26 Results
Swiggy reported consolidated revenue of Rs. 5,561 crore in Q2FY26, up 12.1 percent quarter-on-quarter from Rs. 4,961 crore. The company’s operating loss narrowed to Rs. 799 crore from Rs. 955 crore in the previous quarter. Operating margin also improved from negative 19 percent to negative 14 percent. Loss before tax and Net loss stood at Rs. 1,092 crore, compared to Rs. 1,197 crore in Q1FY26, while earnings per share improved from negative Rs. 4.80 to negative Rs. 4.38.
On a year-on-year basis, revenue rose 54.4 percent from Rs. 3,601 crore to Rs. 5,561 crore in Q2FY25. However, the company’s operating loss widened to Rs. 799 crore from Rs. 554 crore, though the operating margin improved slightly from negative 15 percent to negative 14 percent. Loss before tax and Net Loss expanded from Rs. 626 crore to Rs. 1,092 crore. Earnings per share improved sharply from negative Rs. 62.75 in Q2FY25 to negative Rs. 4.38 in Q2FY26.
Eternal Q2FY26 Results
Eternal posted robust sequential growth in the September quarter, with revenue jumping 89.7 percent quarter-on-quarter to Rs. 13,590 crore from Rs. 7,167 crore. Operating profit rose 107.8 percent to Rs. 239 crore from Rs. 115 crore, while the operating margin remained stable at 2 percent. Profit before tax climbed 46.6 percent to Rs. 129 crore from Rs. 88 crore, and net profit surged 160 percent to Rs. 65 crore compared to Rs. 25 crore in the previous quarter. Earnings per share doubled from Rs. 0.03 to Rs. 0.07.
Year-on-year, revenue more than doubled, rising 183.3 percent from Rs. 4,799 crore in Q2FY25 to Rs. 13,590 in Q2FY26. However, operating profit saw a modest increase of 5.8 percent from Rs. 226 crore to Rs. 239 crore, as margins compressed from 5 percent to 2 percent. Profit before tax declined 45.6 percent to Rs. 129 crore from Rs. 237 crore, while net profit fell 63.1 percent to Rs. 65 crore from Rs. 176 crore in the year-ago quarter. Earnings per share declined from Rs. 0.20 to Rs. 0.07 due to higher costs and margin pressure.
Analysts’ View
Global brokerage Bernstein initiated coverage on both Swiggy and Eternal with Outperform ratings, setting target prices of Rs. 570 for Swiggy implying a potential upside of 41.59 percent from the previous close of Rs. 402.55 and Rs. 390 for Eternal implying a potential upside of 20.94 percent from the previous close of Rs. 322.45. The firm believes both companies are strategically positioned to extend their food delivery success into India’s rapidly expanding quick commerce market, despite intensifying competition.
According to Bernstein, India’s top 5 percent of consumers, about 70 million individuals with a GDP per capita of around USD 20,000, will constitute an addressable market worth USD 80 billion by FY2030.
This affluent segment, the report notes, is driven by convenience and quality and is willing to pay a premium for superior experiences. Sustainable models, therefore, will depend on increasing transaction frequency across multiple use cases and expanding share of wallet through innovation beyond food delivery, such as dining out, events, and entertainment ticketing.
Bernstein estimates the quick commerce market could grow to USD 35 billion by FY2030, led by rising demand in dense urban areas. While the market will remain competitive, it is unlikely to be winner-takes-all, as profitability is expected to be distributed more evenly across major players like Blinkit, Instamart, and Zepto. The brokerage identifies food delivery as the “cash machine” for both Eternal and Swiggy, even though its growth has slowed to below 20 percent as the offline-to-online shift nears saturation.
Future growth of 16-18 percent in net order value is expected to come from innovations such as faster deliveries, healthier offerings, and lower average order values. Bernstein, however, cautions that the wider availability of GLP-1 weight-loss drugs, anticipated around mid-2026, could temporarily impact demand.
The report further highlights that adjacent categories like B2B logistics, food distribution, and “Going Out” segments will be essential for expanding consumer engagement. With 20-25 million unique daily active users and strong cash reserves, both Swiggy and Eternal are well-equipped to maintain their positions. Among the two, Bernstein favours Swiggy, citing Instamart’s superior risk–reward profile and greater potential for valuation re-rating as profitability continues to improve.
-Manan Gangwar
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