Business
-Madhuri Adnal
Food and grocery orders placed through Swiggy and Eternal (Zomato) are expected to become costlier as higher fuel prices feed into delivery expenses. An analysis by Elara Capital links the change to the latest fuel price hike, which the brokerage ties partly to the ongoing war. Platforms now face a choice between raising fees, absorbing costs, or reducing delivery partner earnings.
Elara Capital estimates that quick commerce deliveries currently cost platforms about ₹35-50 per order, while standard food delivery averages around ₹55-60 per order. Fuel forms nearly one-fifth of these amounts, meaning the fuel element alone is roughly ₹9-10 for each delivery on a blended basis across both categories.
Rising fuel prices may increase delivery costs for Swiggy and Zomato (Eternal) by up to ₹1.2 per order, potentially affecting customers and partners, with Elara Capital indicating Zomato is better positioned to manage these pressures than Swiggy.
Fuel price hike and delivery cost impact on Swiggy and Eternal (Zomato)
Based on those figures, a fuel price increase of about 4 per cent equates to a hit of roughly ₹0.44 per order. If fuel prices rise by another ₹10 per litre during the next three to six months, Elara Capital projects the blended cost impact could climb to nearly ₹1-1.2 per order across Swiggy and Eternal (Zomato).
“This impact is likely to be shared partly through customer pass-through, partly absorbed by the platforms and partly reflected in compression of delivery partner economics,” it said. That implies a mix of higher charges for customers, tighter margins for Swiggy and Eternal (Zomato), and possible pressure on payouts to delivery partners.
| Metric | Quick commerce | Food delivery |
|---|---|---|
| Average delivery cost per order | ₹35-50 | ₹55-60 |
| Fuel share of delivery cost | ~20% (₹9-10 per order, blended) | |
| Impact of 4% fuel price rise | ~₹0.44 negative impact per order | |
| Impact if fuel rises ₹10/litre | ~₹1-1.2 negative impact per order, blended | |
Fuel price hike, EV adoption and EBITDA impact for Swiggy and Eternal (Zomato)
Higher fuel prices may also speed up the move to electric vehicles and cycles. Elara Capital expects EV and cycle usage in quick commerce deliveries to reach around 30-40 per cent if fuel becomes dearer by ₹10 per litre. For food delivery, the report assumes EV and cycle penetration near 20 per cent in the same scenario.
“On a blended basis, we assume that the effective fuel-linked impact would apply to ~70 per cent of total orders. Hence, adjusted for EV/cycle penetration, even in the case of a ~₹10/ litre fuel hike, the net EBITDA impact may be closer to ~₹1-2 billion, implying only ~ 4-5/10-12 per cent FY27E adjusted EBITDA downgrade for ETERNAL/SWIGGY, respectively. The impact is higher for Swiggy given its lower profitability cushion and ongoing path towards contribution break-even in quick commerce,” it said.
Elara Capital also compares how Eternal (Zomato) and Swiggy are positioned to manage these fuel-led cost pressures. The brokerage states that Eternal (Zomato) appears better placed because of stronger pass-through tools and a larger advertising revenue base. Eternal (Zomato) can lean more on platform charges while Swiggy still works towards break-even in quick commerce.
“Eternal’s customer base is more premium and less price-sensitive, which gives the company a higher propensity to recover cost rise through platform fees, delivery fee optimisation and handling charges across both food delivery and quick commerce. Further, Eternal’s larger scale and stronger ad revenue base provide an additional margin cushion versus Swiggy. In contrast, Swiggy may face a higher impact, given lower profitability cushion in quick commerce and a more sensitive customer base. Hence, while both the platforms have pass-through levers, Eternal’s ability to absorb and recover fuel-led cost inflation is stronger,” it argued. Overall, the report signals that while both companies face rising fuel costs, Eternal (Zomato) may navigate the pressure more comfortably than Swiggy.
