Swiggy vs Eternal: Bernstein initiates coverage; check targets, rating & more

Overseas brokerage firms Bernstein has initiated coverage on both Swiggy and Eternal with an 'Outperform' rating, identifying both as the best-positioned companies to capitalise on evolving consumer trends in India’s food delivery and quick commerce sectors. Swiggy has been named the brokerage’s top pick, with both Swiggy and Eternal receiving Outperform ratings from Bernstein, underpinned by their strong consumer engagement and innovative growth strategies.

The brokerage highlights that both Swiggy and Eternal enjoy access to approximately 20–25 million unique daily active users across their platforms. This scale, Bernstein notes, enables them to target the top 5% of Indian consumers who are willing to pay for convenience and quality, which is expected to drive transaction frequency and greater wallet share over time.

Bernstein’s analysis underscores the food delivery segment as a reliable source of cash generation for both companies, even as growth moderates below 20% due to the maturing market and the conclusion of the channel-shift phase from offline to online ordering. Innovation in delivery times, healthier food options, and lower average order values are seen as essential to maintain volume growth and defend margins.

The report also points to the highly competitive nature of the quick commerce sector, valued at $35 billion by FY30 in Bernstein’s proprietary study. Swiggy Instamart, Blinkit, and Zepto are expected to remain the top three contenders. Bernstein remarks, “However, we don’t agree with the winner takes all philosophy for QC.” The brokerage argues that while scale offers advantages, profit pools are more evenly distributed than in food delivery.

In evaluating risk and reward, Bernstein places particular emphasis on Swiggy’s Instamart, describing it as having “a better risk-reward return profile with a potential re-rating as it tracks its profitability glide path.” This outlook, according to the report, is one of the key reasons for favouring Swiggy ahead of Eternal, despite both firms’ leadership in their respective segments.

When comparing financial positioning, both Swiggy and Eternal are noted for their strong cash reserves and ability to raise additional capital, which Bernstein says will be vital for defending market share and funding growth in adjacent categories such as dining out, events, and B2B logistics enablement.

Bernstein’s research identifies main competitors in the sector, specifically naming Blinkit and Zepto as significant rivals in the quick commerce space, alongside Swiggy Instamart. The report suggests that incumbents benefit from first-mover advantages in store location, consumer data, and operational discipline, but that profitability will remain competitive across the top-tier firms.

The brokerage also highlights that sustainable business models will depend on consolidating transaction frequency across use cases. Bernstein concludes that steady progress in capturing new growth opportunities and increasing penetration into affluent, urban customer segments is critical for both Swiggy and Eternal as they seek to capture incremental wallet share.

"Overall, we are positive on Eternal’s ability to create investor value with our SOTP giving us March 2027 target price of Rs 390. We are positive of a re-rating on Quick Commerce for Swiggy over next 6 quarters and our SOTP gives us March 2027 target price of Rs 570," Bernstein added.