Swiggy and Zomato shares hit all-time high today. Can they deliver more returns?

Shares of online food delivery giants Swiggy and Zomato extended their rally on Thursday, driven by strong buying interest among investors.
Swiggy surged nearly 9% to hit an all-time high of Rs 565.85 in early trade before settling at Rs 560.50, up 8.18% at 11:14 am on the Bombay Stock Exchange (BSE).
Zomato, too, saw a significant rise, trading 3.65% higher at Rs 296.75, after hitting a record high of Rs 299.25 earlier in the session.
The rally follows Swiggy’s robust Q2 results, which showcased strong revenue growth and promising developments in its quick commerce and food delivery segments.
Nuvama Institutional Equities reported that Swiggy’s Q2 revenue of Rs 3,601.45 crore surpassed the consensus estimate of Rs 3,540 crore, while its net loss of Rs 630 crore was in line with expectations.
However, Swiggy faced challenges in market share as its gross order value (GOV) growth in food delivery and quick commerce lagged behind Zomato’s for H1FY25.
Despite this, Nuvama highlighted Swiggy’s aggressive plans to strengthen its market position by expanding its active dark store area from 1.5 million square feet in March 2024 to 4 million square feet by March 2025. This move, aimed at doubling the number of stores and their size, is expected to help Swiggy meet rising consumer demand.
In food delivery, Swiggy recorded a 14.6% year-on-year increase in GOV to Rs 7,190 crore, with adjusted revenue rising 17.8% year-on-year. The company improved its contribution margin in food delivery to 6.6% of GOV, up from 6.4% in the previous quarter. Nuvama noted that “adjusted EBITDA margin improved further to 1.6% against 0.8% in Q1FY25, driven by higher monetisation in advertising, reducing cost of delivery, and operating leverage.”
Swiggy’s quick commerce segment emerged as a key growth driver. Its Instamart service saw GOV rise 75.5% year-on-year to Rs 3,380 crore, while adjusted revenue grew 113.8% year-on-year. The company also successfully piloted its 10-minute food delivery program, Bolt, which accounted for 5% of total orders within just eight weeks of its launch. Nuvama suggested Bolt shows “immense potential for a scale-up.”
The management remains optimistic about achieving profitability, targeting a breakeven in the quick commerce contribution margin by late 2025 and positive EBITDA at the consolidated level by late 2026.
Meanwhile, Zomato continued to display resilience, maintaining its leadership in certain market segments and capitalising on the growing appetite for quick commerce. It may be noted that brokerage firm CLSA has maintained its ‘Outperform’ rating on the stock and has raised its target price to Rs 370.
With a price target of Rs 370, the international brokerage forecasts an upside potential of over 32 percent from the last close of Rs 280 on the National Stock Exchange. Zomato shares have rallied 131 percent since the start of the year.
Swiggy’s focus on innovation and expansion, alongside Zomato’s sustained growth, suggests that the quick commerce and food delivery sectors hold substantial long-term potential.
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