Bernstein Initiates Coverage on Swiggy and Zomato with 'Outperform' Ratings and Price Targets

Bernstein, a US brokerage, has initiated coverage on Indian companies Swiggy and Zomato (Eternal) with an 'Outperform' rating and set target prices of ₹570 for Swiggy and ₹390 for Zomato. They are seen as best positioned to capture value in India's fast-growing food delivery (FD) and quick commerce (QC) markets. A key growth driver is the affluent Indian segment ('Top-5 per cent Lifestyle Concierges') willing to pay for convenience, representing an $80 billion opportunity by FY2030. Expansion into dining out, events, and ticketing is expected. While QC is competitive, it's not a "winner-takes-all" market, with leaders like Blinkit, Instamart, and Zepto expected to remain profitable. FD remains the "cash machine," with future growth from innovation, though margins are expected to be stable. Bernstein views Swiggy as its top pick due to its Instamart performance and profitability path.

**Impact**: This news is likely to boost investor confidence in Swiggy and Zomato, potentially driving their stock prices towards the set targets. The detailed market analysis may also attract broader interest in the Indian tech and consumer sectors. Impact Rating: 8/10

**Heading: Difficult Terms and Their Meanings** **Brokerage**: A firm that helps investors buy and sell securities. **Initiated Coverage**: Began regularly publishing research and recommendations on a company. **Outperform**: A rating suggesting a stock will perform better than the market average. **Target Price (TP)**: Analyst's projection of a stock's future price. **Food Delivery (FD)**: Service of delivering meals from restaurants. **Quick Commerce (QC)**: Extremely fast delivery service (often within minutes). **GDP per capita**: Gross Domestic Product divided by the population, indicating economic output per person. **FY (Fiscal Year)**: A 12-month accounting period (India: April 1 - March 31). **Mom-and-pop stores**: Small, independently owned businesses. **Scale Effects**: Cost advantages due to a company's size. **Network Effects**: A product/service becomes more valuable as more people use it. **Profitability Glide Path**: A projected timeline for a company to become profitable. **Bourses**: Stock exchange. **Sensex**: A BSE index of 30 major Indian companies.