Macquarie Prefers Dine-Out Stocks as Food Delivery Giants Face Headwinds

Shares of leading online food delivery platforms Zomato and Swiggy suffered sharp losses on March 25, dropping 6 percent and 5 percent, respectively. The decline follows a cautious report by international brokerage Macquarie, which expressed skepticism over the quick commerce sector, preferring investments in dine-out stocks like Devyani International and Westlife Foodworld.

The downturn also coincides with Zepto’s reported $250 million secondary sale ahead of its IPO, which aims to boost the ownership of Indian investors before the company goes public.

Steep Decline in Zomato and Swiggy Stock Performance in 2025

Swiggy’s stock has plunged nearly 40 percent from its peak in 2025.
Zomato’s share price is down nearly 25 percent this year.

The sharp drop follows weaker-than-expected third-quarter financial results, as both companies struggled with slowing demand.

Demand Slowdown Weighs on Food Delivery Sector

Industry executives have acknowledged softening consumer demand, particularly in the latter half of November and December 2024.

Rakesh Ranjan, CEO of Zomato’s food delivery business, stated in a January 20 shareholder letter:
“We are currently experiencing a broad-based slowdown in demand, which started in the second half of November.”
Swiggy’s Food Marketplace CEO, Rohit Kapoor, emphasized on February 5 that while the October-December period is seasonally softer, the company still recorded 19.2 percent growth, which is within their projected range of 18-22 percent.

Zepto’s Expansion Raises Competitive Pressure in Quick Commerce

The continued decline in Zomato and Swiggy shares also reflects the growing dominance of Zepto in the quick commerce sector.

According to Citi’s latest report, Swiggy holds the third-largest market share in quick commerce, trailing behind Blinkit (41 percent) and Zepto.
Swiggy’s estimated market share stands at 23 percent, significantly lower than Blinkit’s leadership position.

Zepto’s upcoming IPO and aggressive market expansion may intensify pricing competition and pressure margins for both Swiggy and Zomato.

Brokerage Views on Swiggy and Zomato Amid Market Volatility

Despite recent stock declines, some analysts remain bullish on Swiggy.

JM Financial has maintained a ‘Buy’ rating on Swiggy, with a target price of Rs 500 per share, implying a potential 46 percent upside from current levels.
The optimism stems from Swiggy’s plans to enter the B2B supplies business through an app called Assure, aimed at helping restaurants source high-quality food ingredients locally.
This move directly challenges Zomato’s Hyperpure business, which already operates in this segment.

Investment Shift Towards Restaurant Chains Over Food Delivery

Macquarie’s recent report suggests that the dine-out industry is positioned for stronger recovery compared to food delivery services.

Devyani International (which operates KFC and Pizza Hut in India) and Westlife Foodworld (McDonald’s India franchisee) are expected to benefit from rising discretionary spending and economic recovery.
The brokerage firm remains cautious about quick commerce, citing intensifying competition and margin pressures.