Zomato vs Swiggy: Which Stock Holds Better Value After Recent Market Correction?

Highlights:

• Zomato stock is trading 32.6% below its peak, currently at ₹205.
• Swiggy shares have dropped 47% from highs, trading at ₹356, below its IPO price of ₹390.
• Quick Commerce (QC) competition is heating up with new entrants like Flipkart Minutes and Amazon Now.
• JM Financial prefers Zomato over Swiggy, citing profitability and execution edge.
• The brokerage sets a target price of ₹280 for Zomato (34.6% upside) and ₹500 for Swiggy (41.7% upside).

Zomato & Swiggy Stocks Slide Amid Market Correction

Shares of India’s two leading food delivery aggregators—Zomato and Swiggy—have witnessed sharp declines, slipping to multi-month lows as broader market corrections weigh on investor sentiment.

While Zomato is trading at ₹205, 32.6% below its all-time high of ₹304.70, Swiggy’s stock has seen an even sharper correction of 47%, currently at ₹356, falling below its IPO price of ₹390.

Investors have turned cautious on new-age tech stocks, particularly as concerns over valuation, profitability, and rising competition in quick commerce (QC) grow. Both companies are aggressively expanding their dark store networks, impacting short-term financials.

Intensifying Competition from Flipkart & Amazon in Quick Commerce

Zomato and Swiggy face new competition in quick commerce, with Flipkart Minutes and Amazon Now entering the space. These new entrants are rapidly scaling their operations in major cities, challenging the dominance of Blinkit (Zomato’s QC arm) and Swiggy Instamart.

However, analysts believe incumbent players hold an advantage due to:

• Higher brand recall and customer loyalty.
• Deeper insights into micro-market demand trends.
• Strong last-mile delivery execution.

JM Financial believes new competitors will struggle to match Zomato and Swiggy’s scale. The brokerage notes that QC winners will be determined by execution strength rather than balance sheet size.

Zomato Maintains Edge Over Swiggy—JM Financial

Despite recent stock declines, JM Financial remains bullish on Zomato, citing its strong market leadership in GOV (Gross Order Value) and revenue terms.

The firm highlights:

• Zomato is India’s only hyperlocal delivery company generating free cash flows at a consolidated level.
• The company has strong execution capabilities, giving it an edge in fending off competition from Flipkart and Amazon.
• Zomato’s business model is more profitable than Swiggy’s, making it a more resilient stock in the current market environment.

Given these factors, JM Financial maintains a bullish stance on Zomato, setting a target price of ₹280, representing 34.6% upside potential.

For Swiggy, the firm has a price target of ₹500, implying a 41.7% potential return, but acknowledges higher execution risks.