Swiggy and Eternal to pay 18 per cent GST on delivery charges; Here's how it will impact the stocks

Zomato, Swiggy Shares Today: Food delivery platforms Swiggy and Eternal will now have to pay 18 per cent Goods and Services Tax (GST) on the delivery charges they collect from customers. But according to analysts and sources close to the companies, the actual financial impact is expected to be marginal.

Eternal Ltd shares were trading higher at over 2 per cent, while Swiggy shares were also up by 1.57 per cent on Friday.

Swiggy, Zomato: Cost Likely to Be Passed On to Customers

Both companies are evaluating the option of passing the additional tax burden to customers in order to protect their margins as per reports. This would follow a common industry trend platforms have historically passed on similar charges to end users across different fee types.

Why Brokerages Are Unconcerned For Food Delivery Stocks

Brokerage JM Financial believes the move will not significantly affect the companies' bottom lines. In food delivery, nearly two-thirds of orders have delivery charges waived. In the quick commerce space, Blinkit already levies 18 per cent GST on delivery, while Instamart — also part of Swiggy — waives fees on most of its orders. As a result, any incremental tax outgo is expected to be manageable.

Food Delivery Segment: Pressures Remain, but Growth May Be on the Horizon

According to Motilal Oswal, both food delivery and quick commerce players have faced multiple headwinds in recent months. Growth in food delivery has been muted due to weak consumption trends and macroeconomic challenges, while profitability in quick commerce has been under pressure from heightened competition, rapid store expansions, and rising customer acquisition costs.

However, the brokerage is turning more optimistic. “We believe the cycle is turning,” it said in a recent report. Food delivery growth, which had slowed to around 17–18 per cent, is now expected to accelerate beyond 20 per cent over the next two to four quarters — helped by festive season demand and regulatory clarity around GST.

Motilal Oswal Upgrades Swiggy, Maintains Positive View on Eternal

Motilal Oswal has upgraded Swiggy to a ‘Buy’ rating, with a revised target price of Rs 560, implying a potential upside of 32 per cent. The firm also reiterated its ‘Buy’ rating on Eternal, with a target price of Rs 420 — indicating a 29 per cent upside from current levels.