Zomato, Swiggy Commissions Too High? Macquarie Flags 30% Downside On Food Delivery Stocks

Macquarie Research has issued a cautionary note regarding the Indian food delivery sector, specifically targeting Zomato and Swiggy. The brokerage has maintained an 'Underperform' rating on both companies, signaling potential challenges ahead. Macquarie highlights concerns over high commission rates, which may lead to a decrease in consumer demand and increased competition, ultimately affecting the profitability of these delivery platforms. The report suggests a possible 30% downside for these stocks due to valuation risks if the current take-rates are compressed. This situation is exacerbated by the rapidly evolving market dynamics and a shift in consumer preferences towards affordability and value. With Zomato and Swiggy being major players in the Indian food delivery market, their stock performance is closely monitored by investors. The findings from Macquarie could prompt stakeholders to reconsider their positions in light of the potential shifts in market conditions and pricing strategies. As the food delivery landscape continues to evolve, companies may need to adapt to ensure sustainability and growth in a highly competitive environment.