Zomato vs Swiggy: Which stock should you invest in? Here's what JM Financial recommends

Confused between Zomato and its recently listed peer Swiggy? Which stock should you add to your portfolio? Analysts from domestic brokerage have recommended these stocks—find out what they think about these two delivery platform companies.

JM Financial's analysts have recommended buying both stocks, with one-year targets implying a potential upside of nearly 40 per cent.

Zomato vs Swiggy: Shares' Past Performance

Recently listed Swiggy's shares have declined by 22.37 per cent since listing, while Zomato, a subsidiary of Eternal Ltd, has delivered a return of 60.71 per cent from its listing price.

Analysts recommend buying Zomato, Swiggy shares; check out targets

The brokerage has recommended buying Zomato shares for a one-year target of Rs 280, implying a potential upside of 38.27 from Thursday's session closing.

Zomato is a clear market leader in terms of GOV and revenue across all its operating business segments, the brokerage said.

"It is also well ahead of the competition on the profitability front across business segments...It is the only major hyperlocal delivery company in the country that, at a consolidated level, is currently generating free cash flows, without having compromised on topline growth," JM Financial stated in a report dated March 11.

It also has a 'buy' stance on Swiggy shares with a target of Rs 500. JM Financial's analysts expect a rise of over 40 per cent from the stock within next one-year. 

However, the brokerage also acknowledged that strong base and a broad consumption slowdown are slowing down the growth of the food delivery market.