Based on a joint report by Bain & Firm and Swiggy, India’s meals supply market is anticipated to develop at a compound annual development price (CAGR) of 18 %, reaching over Rs 2 lakh crore by 2030. The rise of user-friendly apps and technology-driven driver networks has vastly boosted orders and deliveries of ready-to-eat meals, whereas evolving client expectations have additional accelerated this development prior to now decade.
What’s the Information?
The shares of Everlasting (Zomato) and Swiggy continued to say no after a report by Bloomberg acknowledged that their competitor Zepto had deliberate to boost $250 million by way of a secondary share sale earlier than its Preliminary Public Providing. Zepto, by way of this transfer, goals to amplify home possession forward of its proposed IPO.
As per the Bloomberg report, the non-public fairness divisions of Motilal Oswal Monetary Providers Ltd. and Edelweiss Monetary Providers Ltd. are in discussions with Zepto for a secondary share sale.
Moreover, overseas brokerage Macquarie stays cautious about meals supply gamers like Swiggy and Zomato. Nonetheless, it’s anticipated that increased discretionary earnings, backed by latest favorable tax insurance policies, will help a restoration within the franchise section, advantaging corporations like Devyani Worldwide and Westlife Foodworld.
Brokerage Agency BofA Securities downgraded the shares of Meals Supply Giants- Zomato and Swiggy:
Zomato Ltd
The shares of Zomato Ltd, with a complete market capitalization of Rs 1.96 Lakh Crores on Wednesday, have been buying and selling at Rs 201.9 per share, which was 3.8 % down from the earlier closing value of Rs 209.81. The shares are buying and selling at a reduction of 33 % from its 52-week excessive of Rs 304.7 apiece. The shares of Zomato have declined by 9.27 % since Monday, March 24, 2025.
On March 26, 2025, BofA Securities downgraded the shares of Zomato to “impartial” from its earlier score of “purchase” and has decreased its goal value to Rs 250 per share from Rs 300.
Zomato Ltd operates a B2C know-how platform connecting prospects, restaurant companions, and supply companions throughout a number of providers like meals supply and dining-out choices. Its key enterprise verticals embody Meals Supply, Hyperpure, Fast Commerce, & Going Out.
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Swiggy Ltd
The shares of Swiggy Ltd, with a complete market capitalization of Rs 74,106 Crores on Wednesday, have been buying and selling at Rs 324.6 per share, which was 3.8 % down from the earlier closing value of Rs 337.5. The shares are buying and selling at a reduction of 47 % from its 52-week excessive of Rs 617 apiece. The shares of Swiggy have declined by 7.6 % since Monday, March 24, 2025.
The brokerage double downgraded Swiggy from a “purchase” score to an “underperform” score and reduce its value goal sharply, from Rs 420 to Rs 325 per share. Swiggy’s value goal is now beneath its IPO value of Rs 390 per share.
Swiggy Ltd operates throughout over 600 cities, providing providers like meals supply, fast commerce by way of Instamart, and package deal supply through Swiggy Genie. Its key enterprise vertices embody Meals Supply, Out of House Consumption, Fast Commerce, Provide Chain & Distribution & Platform Improvements.
BofA Securities’ View on the Trade
Although the brokerage stays optimistic on medium-term prospects, the anticipation of easing development and the sluggish tempo of margin enchancment within the meals supply sector led to the downgrades of Swiggy and Zomato shares.
Brokerage expects increased competitors for the subsequent 12-15 months as new platforms launch and current gamers increase into one another’s markets. These new platforms are prone to supply increased preliminary reductions, pushing current corporations into enlargement mode, which can result in elevated losses. The competitors may even drive increased advertising prices, platform reductions, and decreased supply costs. Moreover, darkish retailer leases and wages are anticipated to rise.
Written By Adhvaitha Nayani
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