The firm believes that both players are well-positioned to tap into the fast-evolving digital consumption landscape, particularly within the food delivery (FD) and quick commerce (QC) segments.
The coverage comes amid the rapid expansion of India’s consumer-tech space, with Eternal and Swiggy at the forefront of catering to affluent, convenience-seeking urban customers.
Bernstein noted that in a competitive landscape, these companies are “best placed to replicate their FD success and create significant investor value”.
Here’s a detailed view of Bernstien on the stocks:
Targeting India’s top 5% consumer classBernstein’s thesis is anchored in the potential of India’s affluent consumer base, specifically the top 5%, or roughly 70 million individuals, with a GDP per capita of around ~$20,000. The brokerage estimated this group could represent a ~$80 billion relevant market by FY30, based on their willingness to pay for convenience and quality.
“Sustainable business models will require consolidating transaction frequency across use-cases and hence a higher share of wallet of these customers,” the report stated. It added that achieving this will require investment in new use-cases and innovation beyond core segments such as food delivery and quick commerce, including entertainment, events, and other discretionary spending categories.
Quick Commerce to remain highly competitive
In its analysis of the quick commerce segment, Bernstein emphasized that the market is poised for growth but remains fiercely contested. The firm projects a $35 billion QC market by FY30, citing a proprietary database indicating that value-driven consumers in dense urban centers continue to drive demand.“Quick Commerce will remain intensely competitive,” the report noted, explaining that while players like Blinkit, Instamart, and Zepto are gaining share, the business lacks network effects, making profitability harder to achieve than in food delivery. “Store location, consumer data and operational rigor are key value drivers,” it said, adding that QC models benefit from operational efficiency rather than winner-takes-all dynamics.
Food delivery identified as a core cash engine
Bernstein described food delivery as a structural profit center for both companies, calling it “the cash machine.” It noted that food delivery growth has moderated as the market matures, but higher average order values (AOVs) and operating leverage are sustaining margins in the 16–18% range.
“FD growth has fallen below 20% as the ‘channel-shift phase’—i.e., pulling latent demand from dine-in / offline delivery to platform delivery—is over,” the report said. It added that generalization of GLP-1 drugs by mid-2026 could further alter global consumption patterns, potentially impacting growth, but that healthier and premium food options would help maintain AOV and profitability in India.
Monetizing adjacencies: Going out and B2B
The brokerage also identified optionalities such as dining out, events, and B2B enablement as critical levers for increasing consumer wallet share. These segments align well with the lifestyle profiles of FD and QC customers and represent new growth opportunities.
“Steady progress on these metrics is critical for both Eternal & Swiggy as it indicates their ability to penetrate incremental share of consumer wallet,” the report observed. It also cited the role of food distribution and logistics in driving value through B2B partnerships.
Stock preference
In conclusion, Bernstein stated: “Eternal & Swiggy are the companies best placed in India to capture these market trends.” The firm highlighted three key strengths: a large daily active user base (~20–25 million), robust monetization through food delivery, and strong cash positions.
Bernstein’s preference within the sector is Swiggy, backed by its QC vertical, Instamart.
“We believe Swiggy’s Instamart offers a better risk-reward return profile with a potential re-rating as it tracks its profitability glide path,” the brokerage said, reiterating its ‘Outperform’ stance on both stocks.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
