HSBC downgraded Zomato’s target price to Rs 300 from Rs 350 while maintaining a “Buy” rating, and cut Swiggy’s target to Rs 300 from Rs 380 with a “Hold” recommendation. The brokerage warned that Blinkit’s prices remain 6-8% more expensive than those of competing platforms, risking a loss of market share in the near term.
“The heightened competitive environment in the QC industry threatens the industry-best unit economics of Blinkit,” HSBC said. “We are surprised by the recent, relatively muted response by Blinkit to this competition, risking a loss of market share in the near-term.”
Platform fees have now climbed to Rs 14.9 per order (excluding GST) for both Zomato and Swiggy, representing 3-4% of average order value. Motilal Oswal called this “eye-watering” and suspects both platforms are “leaving some demand on the table.”
“Yet, it is notable that growth rates continue to hold in the 15-20% range despite this implicit demand tax,” Motilal Oswal noted, maintaining “Buy” ratings on both stocks.
The valuation correction has been severe. Zomato stock is down more than 30% from its October 2025 peak while Swiggy has declined 50% from its peak.
HSBC adjusted its valuation methodology, reducing the food delivery business multiple to 35x FY27e EV/EBITDA from 40x, citing global food business deratings. The brokerage now values Blinkit at 35x FY30e EV/EBITDA, implying INR1.5 trillion.Motilal Oswal’s channel checks ahead of 4QFY26 earnings suggest that food delivery is likely to post an improved quarter, with both players expected to report 18-20% year-on-year growth in gross order value, aided by a benign base.
However, quick commerce faces headwinds. “Competitive intensity, particularly from Zepto, which continues to operate at lower minimum order values and higher discounts, is beginning to weigh on volume growth for both Blinkit and Swiggy Instamart,” Motilal Oswal said.
Blinkit maintains the highest minimum order value among competitors, contributing to its industry-leading profitability but making it vulnerable to rivals offering cheaper alternatives like Amazon, Flipkart and Zepto.
Despite near-term pressures, Motilal Oswal believes valuations have turned attractive following the correction, with new target prices implying approximately 37x FY28E EV/EBITDA for Blinkit and 0.4x FY28E EV/GMV for Swiggy.
Food delivery continues to serve as the primary cash flow lever for quick commerce ambitions, with platform fee hikes and improving unit economics generating incremental EBITDA needed to absorb losses in Blinkit and Instamart, according to Motilal Oswal.