Morgan Stanley has expressed a bullish outlook on Indian food delivery and quick commerce companies Swiggy and Eternal, highlighting both as promising investment opportunities. The brokerage has initiated coverage on both stocks with an "Overweight" rating, citing improved execution, a large total addressable market (TAM), and visible potential for profitability.
According to the report, Swiggy has made notable improvements in execution, especially within its food delivery operations. However, the more significant growth catalyst lies in its quick commerce business. Morgan Stanley estimates that the total addressable market for quick commerce in India could expand to ₹4.85 lakh crore by 2030. Despite ongoing heavy investments in the segment, the market currently seems to be underestimating the resulting topline growth. The report suggests that Swiggy’s quick commerce business could achieve EBITDA break-even by the second half of FY29. Given the importance of the next six quarters in determining the company’s direction, Morgan Stanley believes Swiggy is at a critical inflection point. Consequently, it has set a target price of ₹450 for the stock.
In addition to Swiggy, Eternal has been identified as Morgan Stanley’s top pick in the space. Eternal enjoys a leadership position in both food delivery and quick commerce segments, giving it a substantial competitive edge. The brokerage firm is particularly impressed by Eternal’s balance sheet strength, which it considers superior to peers. Moreover, Morgan Stanley believes the chances of equity dilution for Eternal are quite low, enhancing its attractiveness from a risk-reward perspective. Technically, the stock has formed a strong base in the ₹200–220 range, and significant downside appears unlikely. With this in mind, the firm has given it an Overweight rating with a target price of ₹320.
The market responded positively to Swiggy’s prospects, with the stock showing up to 2.5% intraday strength and hitting fresh day highs.Brokerage Firm noted that Swiggy had been in a downtrend since January 6, 2025, following a negative crossover in momentum indicators. However, in today’s session, the first positive crossover since that date was observed in both leading and lagging indicators, indicating a potential shift in trend. If the stock manages to break above the ₹350 resistance level, further strong upward movement could follow. The ₹335 level now serves as a robust support base
Meanwhile, Zomato also featured positively in the discussion. The stock recently emerged from a consolidation phase after experiencing a shakeout below ₹225. Having regained strength, analysts believe that a breakout above ₹246–247 could trigger a fresh rally.
Morgan Stanley’s optimism around Swiggy and Eternal highlights the rapidly growing potential of India’s food delivery and quick commerce sectors. As both companies enhance their operational efficiency and move closer to profitability, investors are likely to find increasing value in these names. With supportive technical patterns and long-term structural trends in their favor, Swiggy and Eternal appear well-positioned to benefit from the evolving consumer landscape.
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