Swiggy shares rally 8% after Eternal's Q1 earnings; mcap tops Rs 1 lakh crore

Shares of Swiggy were soaring high on Tuesday, mimicking the gains in its peer Eternal after its strong set of numbers in the June 2025 quarter. The stock has reported a rise in three out of the last four sessions, thanks to a strong earnings report card by Zomato parent Eternal on Monday.

Eternal is the parent company of Zomato and Blinkit, which are arch rivals with Swiggy in the food delivery and quick commerce business. Shares of Eternal soared nearly 15 per cent on Tuesday to hit new all time highs and Swiggy also felt the rub-off effect. However, the stock is far behind its all time peak.

Blinkit's revenue for the quarter jumped to Rs 2,400 crore, overtaking Zomato's food delivery revenue of Rs 2,261 crore for the first time. The development is significant, as the quick commerce vertical now contributes more to Eternal's topline than its core food delivery business.

Eternal's consolidated revenue rose 70 per cent year-on-year to Rs 7,167 crore, beating estimates. However, the company reported a 90 per cent crash in its bottomline to Rs 25 crore in the Q1FY26 from Rs 253 crore a year ago, indicating continued pressure on margins. Ebitda for the quarter stood at Rs 115 crore for the reported quarter.

Against a 15 per cent jump in Eternal's share price, Swiggy stock gained 7.8 per cent to Rs 426.35 on Tuesday, commanding a total market capitalization of Rs 1.05 lakh crore. The stock is still down 31 per cent from its 52-week high at Rs 617. The stock is above nearly 9 per cent from its IPO price of Rs 390 apiece. The company raised a total of Rs 11,327.43 crore via primary route.

Swiggy is scheduled to report its April-June quarter results on July 31, 2025 (Thursday). Stock market analysts and investors will closely track the company's performance, especially management commentary on the quick commerce vertical, where Blinkit has set the bar high.

Swiggy has narrowed its food delivery margin gap with Zomato from over 140bps in Q2FY24 to 81bps by Q4FY25, with revenue expected to reach Rs88.5bn by FY27E, driven by an 18 per cent GOV CAGR over FY25–FY27E and improved ad monetization, said Nirmal Bang Institutional Equities, while initiating coverage on it. "We  value Swiggy’s food delivery business at par with Zomato."

In quick commerce, the addition of 412 new dark stores during Q3 and Q4FY25 should aid throughput and utilization, potentially turning contribution margins positive by FY27E, Nirmal Bang said. "We view the positive adjusted Ebitda in out-of-home consumption as of Q4FY25 as a key milestone. We derive a fair value of Rs 500 per share for the business," it added with a 'Buy' rating.

We expect 1QFY26 revenue growth to come in at 49 per cent YoY, driven by 19 per cent YoY growth in food delivery revenues and 129 per cent YoY growth in Instamart revenues. The sharp 113 per cent YoY and 24 per cent QoQ GMV growth in Instamart will be driven by rapid store addition, said Kotak Institutional Equities.

"We model a 30-bps QoQ contraction in the CM of the food delivery business to 7.5 per cent in Q1 on account of higher delivery cost; this will result in 2.7 per cent EBITDA margin as GMV for this segment, down 20 bps qoq. We expect Ebitda loss of Rs 850 crore for the Instamart business, sharply higher yoy, as we model losses from new stores as well as higher competitive intensity," it added.

JM Financial has a 'Buy' rating on Swiggy with a target price of Rs 460, while Kotak Institutional has an 'Add' rating on the stock with a target price of Rs 420.