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Shares of food delivery and quick-commerce rivals Swiggy and Eternal saw a notable uptick on August 20, 2025, after DAM Capital Markets initiated coverage on both companies with ‘Buy’ ratings. The brokerage’s bullish outlook triggered investor enthusiasm, pushing Swiggy’s stock up by over 3 percent and Eternal’s by more than 2 percent during intraday trade. The rally comes amid growing confidence in the profitability trajectory of their food delivery businesses and the long-term potential of their quick-commerce arms.
DAM Capital’s coverage includes detailed projections for revenue growth, margin expansion, and free cash flow generation, positioning both companies as key beneficiaries of India’s evolving consumer tech landscape.
Key Highlights from DAM Capital’s Coverage
- Swiggy shares rose over 3 percent to an intraday high of Rs 422.20
- Eternal shares jumped 2 percent to a record high of Rs 331
- Target price for Swiggy set at Rs 515, implying 26 percent upside
- Target price for Eternal set at Rs 400, implying 24 percent upside
- Margin expansion and improved working capital cited as key drivers
Profitability Outlook and Quick-Commerce Strategy
DAM Capital expects both companies to see significant margin improvement over the next three years, supported by lower capital expenditure and better working capital efficiency. The brokerage believes this will generate strong free cash flow, which can be reinvested into their quick-commerce operations.
- Eternal’s Blinkit expected to achieve EBITDA profitability by Q4 FY26
- Swiggy’s Instamart projected to reach EBITDA breakeven by Q4 FY28
- Free cash flow from food delivery to fund quick-commerce expansion
- Swiggy expected to turn PAT positive by FY28; Eternal already PAT profitable
Revenue and Growth Projections
According to DAM Capital, Eternal is projected to post a revenue growth of 42 percent between FY25 and FY28, while Swiggy is expected to grow at 28 percent over the same period. Gross Order Value (GOV) for both platforms is forecast to increase by 18 to 20 percent annually, driven by higher order volumes and improved customer retention.
- Eternal’s EBITDA CAGR estimated at 30 percent over three years
- Swiggy’s EBITDA CAGR projected at 60 percent, reflecting operational leverage
- Both companies expected to benefit from rising demand in Tier 2 and Tier 3 cities
Market Sentiment and Share Performance
The ‘Buy’ calls have added momentum to already strong stock performances. Eternal’s shares have gained over 6 percent in the past five days and 21 percent in the past month, while Swiggy has risen nearly 5 percent in five days and 6 percent over the past month. Both stocks have outperformed broader indices, reflecting investor optimism around tech-driven consumer platforms.
- Eternal’s stock up 41 percent over the past six months
- Swiggy’s stock up 12.5 percent in the same period
- Eternal’s current P/E ratio stands at 1,037.5, indicating high growth expectations
Competitive Landscape and Strategic Positioning
Swiggy and Eternal continue to dominate India’s food delivery and quick-commerce sectors, despite rising competition from newer entrants like Rapido’s Ownly. DAM Capital’s report suggests that both companies are well-positioned to defend market share through technology investments, brand loyalty, and operational scale.
- Swiggy recently increased platform fees to Rs 14 in high-demand zones
- Eternal’s Blinkit expanding into new geographies with faster delivery models
- Both firms investing in AI-driven logistics and customer personalization
Looking Ahead
DAM Capital’s endorsement signals growing institutional confidence in the long-term viability of Swiggy and Eternal’s business models. As both companies move toward profitability and scale their quick-commerce operations, investors are likely to remain focused on execution, cost control, and competitive differentiation.
Sources: Moneycontrol, CNBC-TV18, Economic Times.
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