Zomato Vs Swiggy: Both Zomato and Swiggy are engaged in almost similar types of business activities and are catering to the similar type of customers. Both companies are listed on stock exchange and Investors are coming to the Stock Market Experts asking the question as to which company is better for Long Term Investment. In this article, we have considered several factors and have tried to answer the questions being raised by the existing as well as prospective Investors.
When considering Zomato Vs Swiggy for long-term investment, several factors come into play, including financial performance, market positioning, operational efficiency, and growth potential in India’s rapidly expanding food delivery and quick commerce sectors. Both companies dominate the Indian online food delivery market, forming a near-duopoly, but their current trajectories and strategic approaches differ, impacting their investment appeal.
Zomato, listed since July 2021, has established itself as the market leader with a 58% share in food delivery and a 40-45% stake in quick commerce through its Blinkit acquisition. Its financial performance is a significant strength: in FY25, Zomato’s parent, Eternal, reported a 64.5% revenue growth to ₹21,320 crore and a net profit of ₹527 crore, a 50.1% increase from FY24. This profitability, coupled with a robust gross order value (GOV) CAGR of 23%, underscores Zomato’s operational efficiency and market traction. Blinkit, with 1,301 dark stores and a 126.2% revenue surge to ₹5,206 crore in FY25, has given Zomato a strong edge in quick commerce, a segment projected to grow at 60-80% annually. Zomato’s higher average order value (AOV) and 20 million monthly transacting users (MTUs) compared to Swiggy’s 14 million further highlight its scale. Additionally, Zomato’s focus on cost optimization, including a 22% improvement in delivery margins and an 18% reduction in cost per delivery, supports its path to sustained profitability. Its market capitalization of ₹2,19,542 crore reflects strong investor confidence, despite a high P/E ratio of 390, indicating a premium valuation.
Swiggy, which went public in November 2024, is a compelling but riskier option. It reported a 34.3% revenue growth to ₹15,623 crore in FY25 but remains unprofitable, with losses widening 32.6% to ₹3,117 crore. Its food delivery business has reached breakeven with a modest 0.8% EBITDA margin, lagging behind Zomato’s 3.4%. In quick commerce, Swiggy’s Instamart, with 1,021 dark stores and a 117.6% revenue increase to ₹2,130 crore, trails Blinkit in GOV, AOV, and profitability (EBITDA margin of -11.7% versus Blinkit’s -0.1%). However, Swiggy’s integrated app strategy, combining food delivery, quick commerce, and services like Genie, enhances cross-utilization and customer retention. Analysts like Macquarie see long-term potential, forecasting a target price of ₹700 if Instamart’s unit economics improve, though its short-term “underperform” rating and ₹325 target reflect high operational costs and competitive pressures. Swiggy’s valuation at ₹71,840 crore, significantly lower than Zomato’s, suggests it trades at a discount, potentially offering value for risk-tolerant investors.
Zomato Vs Swiggy-Conclusion:
For long-term investment, Zomato appears the safer bet due to its profitability, larger market share, and operational efficiencies. Its proven track record and leadership in both food delivery and quick commerce provide stability. Swiggy, while showing promise with aggressive expansion and a discounted valuation, faces challenges in achieving profitability and catching up in quick commerce. Investors with a higher risk tolerance may find Swiggy appealing for its growth potential, especially if it narrows the gap with Zomato through improved margins and scale. However, Zomato’s stronger fundamentals and clearer path to profitability make it the better choice for most long-term investors. Always consult a financial advisor before deciding, as market dynamics and individual risk profiles vary.
Disclaimer: Investments in Capital Market/Share Prices are subject to market fluctuations and are dependent on several factors. These predictions are based on the current market conditions and the future market expectations. Investors are advised to take into consideration all these factors before making any investment in Capital Market. This article should not be treated as Investment advisory and is for general Guidance & Educational purpose only. We keep revising our share price targets based on the latest information available with us. Please keep visiting our website regularly to keep yourself updated. News4You does not offer investment advice and does not encourage any action based on its content.
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