Zepto IPO Delay Boosts Swiggy & Eternal Stock

The delay in Zepto’s initial public offering, reportedly due to insufficient mutual fund interest, has evidently benefited key competitors Swiggy Ltd. and Zomato-parent Eternal Ltd. Both companies witnessed substantial stock appreciation through July, despite presenting a mixed bag of financial results for the June quarter.

Market Reaction to Zepto’s Setback

This market dynamic underscores how a competitor’s hurdle can translate into immediate investor confidence for established players. The shift in sentiment was palpable across trading sessions last month.

• Eternal’s stock climbed by nearly 15% in July.
• Swiggy’s shares surged by 23.63% over the same period.

The absence of Zepto from the IPO pipeline redirected attention and potentially capital towards these major players in India’s food delivery and quick commerce sectors.

Q1 FY27 Performance Overview

While stock performance was strong, the June quarter brought varied operational outcomes for the two companies. Eternal demonstrated significant profit growth, whereas Swiggy focused on narrowing its losses.

• Eternal’s net profit quadrupled to Rs 92 crore in Q1 FY27, up from Rs 25 crore year-over-year.
• Its topline soared to Rs 20,211 crore, surpassing Rs 7,167 crore from the previous fiscal year and beating analyst forecasts.
• Swiggy reduced its net losses to Rs 791 crore, down from Rs 1,197 crore in the prior year, though it did not achieve profitability.
• Swiggy’s revenue from operations increased by 37.3%, reaching Rs 6,812 crore from Rs 4,961 crore.

Jefferies’ analysis confirms Eternal’s market dominance in both food delivery and quick commerce, yet acknowledges Swiggy’s progress in improving its profitability metrics. Operationally, Eternal expanded its margins, while Swiggy successfully decreased its EBITDA loss.

Analyst Consensus and Month-End Close

Market analysts largely maintain a positive outlook on both stocks, reflecting confidence despite the mixed quarterly results. The month of July closed with slight corrections for both, even as the broader market saw gains.

• Of 34 analysts, 31 recommend buying Eternal’s stock.
• For Swiggy, 21 out of 30 analysts advise buying shares.
• On the final trading day of July, Swiggy’s stock closed 3.9% lower at Rs 284.70.
• Eternal’s stock closed 2.6% lower at Rs 302.65, contrasting with a 0.27% gain in the Nifty index.

The Zepto IPO delay, coupled with these mixed but strategically improving financial performances, illustrates a dynamic competitive landscape where market positioning and operational efficiency continue to drive investor interest in the Indian quick commerce and food delivery space.