Zomato, Swiggy shares tumble up to 3% after BofA Securities downgrades stocks, cuts target prices

The increasing losses in the quick commerce segment was cited as the primary reason for the downgrades

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26 Aug, 2025 12:21

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The shares of food delivery majors Zomato and Swiggy plunged on March 26 after Bank of America (BofA) Securities downgraded the two stocks. Zomato shares tumbled nearly 3 percent to trade at Rs 204 apiece, while those of Swiggy were down 1.48 percent to trade at Rs 333 apiece.

BofA Securities on Zomato:

International brokerage BofA Securities downgraded the shares of Zomato to 'Neutral' from its earlier 'Buy' rating. It reduced the stock's target price to Rs 250 per share from the earlier Rs 300 per share. The latest target price implies an upside potential of over 19 percent from the stock's previous closing price.

BofA Securities on Swiggy:

Swiggy shares, however, received a double downgrade from the brokerage. BofA rated the stock 'Underperform', down from its earlier 'Buy' rating. It also reduced the stock's target price to Rs 325 per share, from the earlier Rs 420 per share. The latest target price implies a downside potential of nearly 4 percent from the stock's previous closing price.

The increasing losses in the quick commerce segment was cited as the primary reason for the downgrades. BofA Securities predicted Zomato and Swiggy's earnings before interest, tax, depreciation and amortisation (EBITDA) for FY26 and FY27 to be 20 percent to 50 percent lower than consensus estimates.

However, the brokerage saw no significant slowdown in the food delivery segment. It however noted the rising competition in the quick commerce space.

Also read: Macquarie cautious on Zomato, Swiggy

Notably, Zomato shares have fallen nearly 29 percent in 2025 so far, while Swiggy shares steeply fell around 40 percent during the period. The two firms, which maintain a duopoly in the food delivery market, have seen a significant decline in stock prices after reporting lower-than-expected results for Q3 FY25 amid rising competition from new players in the quick commerce segment.

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