HSBC sees up to 25% upside in quick commerce stocks as consumer-facing names navigate a tricky input-cost environment.
Shares of Swiggy, Eternal (formerly Zomato), Meesho, and Nykaa are commanding investor attention on Monday as a fresh wave of commodity-price inflation puts pressure on margins across India’s consumer-facing internet sector — even as brokerage HSBC maintains a bullish outlook on the quick commerce segment, identifying upside potential of up to 25% in select names.
HSBC’s quick commerce call
Commodity inflation, particularly in edible oils, packaging materials, and fuel, has squeezed restaurant partners and third-party sellers that form the backbone of Swiggy and Eternal’s gross merchandise value. Analysts caution that if cost pass-through to consumers proves sticky, order frequency — which both platforms track as a north-star metric — could soften in the June quarter.
Company-by-company watch
Swiggy — Investors are watching whether the company’s Instamart vertical can sustain its gross-order-value run-rate as the platform expands its dark-store footprint to smaller metros. Rising fuel costs are a margin risk for last-mile logistics.
Eternal (Zomato) — The renamed entity is navigating its Blinkit quick-commerce integration while commodity costs seep into restaurant economics. EBITDA trajectory in Q1 FY27 will be a key near-term trigger.
Nykaa — Premium beauty categories have shown relative resilience, insulating gross margins better than mass-market peers. However, packaging-cost inflation and a cautious urban consumer are factors the management flagged in its last earnings call.
Meesho — Still private and widely expected to file for a domestic IPO, the social-commerce platform’s cost structure is under scrutiny as apparel-input costs rise. Any update on listing timelines could move sentiment across the broader consumer internet basket.
Despite near-term pressures, the broader consensus on Dalal Street remains constructive on the long-term stories of all four companies. Analysts at several brokerages note that India’s internet consumption story — underpinned by a young, mobile-first population and rising disposable incomes in Tier-2 and Tier-3 cities — remains one of the most compelling structural growth narratives in emerging markets.
