{"id":26472,"date":"2025-03-26T14:42:34","date_gmt":"2025-03-26T09:42:34","guid":{"rendered":"https:\/\/bigbreakingwire.in\/?p=26472"},"modified":"2025-03-26T15:16:45","modified_gmt":"2025-03-26T09:46:45","slug":"bofa-downgrades-zomato-swiggy-competition","status":"publish","type":"post","link":"https:\/\/bigbreakingwire.in\/bofa-downgrades-zomato-swiggy-competition\/","title":{"rendered":"Bank of America Downgrades Zomato and Swiggy Amid Rising Competition in Quick Commerce"},"content":{"rendered":"
<\/div>\n

Food Delivery Giants Face Growth Challenges<\/strong>

Bank of America has lowered its ratings on Zomato and Swiggy, citing concerns about slowing growth in food delivery and increasing competition in quick commerce.

BofA Cuts Ratings and Target Prices<\/strong>

The brokerage downgraded Zomato from \u2018buy\u2019 to \u2018neutral\u2019 and Swiggy from \u2018buy\u2019 to \u2018underperform\u2019. Along with the rating cut, BofA has also reduced the target price for both companies:

Zomato: Rs 300 \u2192 Rs 250

Swiggy: Rs 420 \u2192 Rs 325<\/p>\n\n\n\n

Despite the downgrade, analysts remain positive about their medium-term prospects.<\/p>\n\n\n\n

Intense Competition in Quick Commerce Hurts Margins<\/strong>

The quick-commerce industry, once seen as a high-growth and profitable sector, is now struggling due to rising losses and stiff competition. New players are entering the market, leading to:

Increased platform discounts

Higher marketing expenses

Lower delivery charges for consumers<\/p>\n\n\n\n

Why Zomato Has an Edge Over Swiggy<\/strong>

Between the two food-tech giants, Zomato is in a stronger position due to:

Larger scale and first-mover advantage in quick commerce

Stronger financials and better profit margins

Healthier cash reserves<\/p>\n\n\n\n

On the other hand, Swiggy is grappling with higher losses, especially in its quick-commerce segment.<\/p>\n\n\n\n

Rising Costs and Market Expansion Challenges<\/strong>

As competition heats up, both Zomato and Swiggy are expanding their services and investing in 10-minute in-house cafe models. However, this is leading to higher operational expenses, including:

Increased rental costs for dark stores

Higher wages for delivery partners

Marketing and promotional expenses<\/p>\n\n\n\n

Moreover, the brokerage does not expect significant platform fee hikes, as demand growth is slowing.<\/p>\n\n\n\n

Stock Performance: Zomato vs. Swiggy<\/strong>

In the past 12 months:

Zomato\u2019s stock gained 11% but has fallen 26% in 2025 so far.

Swiggy\u2019s stock has declined 38% year-to-date.<\/p>\n\n\n\n

Final Thoughts<\/strong>

The food delivery and quick-commerce sectors are undergoing a major shift. While Zomato appears to be better positioned, both companies face challenges from rising costs and aggressive competition. With new players disrupting the market, the next 12 to 15 months will be crucial in shaping the future of these platforms.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Food Delivery Giants Face Growth Challenges Bank of America has lowered its ratings on Zomato and Swiggy, citing concerns about slowing growth in food delivery…<\/p>\n","protected":false},"author":1,"featured_media":26471,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[65,618,616],"tags":[1940,4891],"class_list":["post-26472","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bigbreakingnow","category-brokerage-reports","category-stock-in-news","tag-swiggy","tag-zomato","entry","rows"],"jetpack_publicize_connections":[],"modified_by":"bigbreakingwire","jetpack_featured_media_url":"https:\/\/bigbreakingwire.in\/wp-content\/uploads\/2025\/03\/pexels-photo-187041-22.webp","jetpack_shortlink":"https:\/\/wp.me\/pfgCxS-6SY","jetpack_sharing_enabled":true,"jetpack_likes_enabled":false,"_links":{"self":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts\/26472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/comments?post=26472"}],"version-history":[{"count":1,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts\/26472\/revisions"}],"predecessor-version":[{"id":26473,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/posts\/26472\/revisions\/26473"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/media\/26471"}],"wp:attachment":[{"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/media?parent=26472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/categories?post=26472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bigbreakingwire.in\/wp-json\/wp\/v2\/tags?post=26472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}