Eternal Stocks Drop 5% After UBS Flags Loss Of Food Delivery Market Share To Swiggy In November

Eternal shares snapped a three-day winning streak on Tuesday, sliding over 5 per cent as investors booked profits after a UBS brokerage note flagged a loss of food delivery market share to Swiggy in November.

The stock fell as much as 5.29 per cent to an intraday low of Rs 282.65 per share on the National Stock Exchange, reversing gains from the previous three sessions.

According to a UBS note cited by Informist, Swiggy gained market share from Eternal in the food delivery segment during November.

The brokerage said overall industry order volumes declined 5.3 per cent month-on-month in November. During the same period, Eternal’s order volumes dropped 4.4 per cent, while Swiggy’s volumes edged up 0.1 per cent.

UBS attributed Swiggy’s relative outperformance to a fall in average order value and initiatives such as Snacc, Bolt and the 99 store, which helped support overall order volumes.

The brokerage also noted that Eternal had outperformed Swiggy over the previous two months.

In Wednesday’s session, Eternal shares were down 5 per cent, while Swiggy stock slipped 3 per cent. Both stocks are rated ‘buy’ on average by analysts, according to data compiled by LSEG.

What’s making the Street nervous?

The government has approved the implementation of four labour codes with effect from November 21, 2025. These codes were passed by the Parliament in 2020 and were awaiting implementation. According to PIB, 29 labour laws have been consolidated into four codes with the aim of easing compliance and modernising outdated provisions while safeguarding workers’ rights.

Platform companies (such as Eternal and Swiggy) will need to contribute to a social security pool, which will be used to provide social security benefits to gig workers. A central minimum wage, higher than the current minimum wage, may have an impact on wage bills for employers across sectors, according to Kotak Institutional Equities.

Assuming companies such as Eternal and Swiggy have to shell out an incremental 5 per cent of annual payments to workers, the food delivery businesses could see an impact to the tune of Rs 3.2/order, while quick commerce (QC) businesses could see an impact of Rs 2.4/order. Analysts at the brokerage firm believe companies would pass on the impact of these to consumers with time via higher platform fees or other charges.

From a long-term perspective, Zomato has built a resilient business model by securing multiple strategic verticals and delivering broad-based growth. However, near-term challenges, such as rising competitive intensity and rapid store expansion, are likely to keep profitability under pressure, an analyst at Axis Direct said in the Q2 result update.

Meanwhile, the GST rate cuts have brought down the average GST on Blinkit’s typical basket by ~3 percentage points, which should drive more demand. The management said it certainly expects a positive rub-off on demand due to this from Q3FY26 onwards (given the changes came into effect only towards the end of Q2FY26). As far as Q2FY26 is concerned, the company said it saw a negative impact on both growth and margins as customers went into wait-and-watch mode, delaying their purchases across categories, including the ones where no GST rate changes were announced.

On a year-to-date basis, Eternal shares have gained 3.3 per cent, while Swiggy has fallen 25 per cent.

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