Shares of food delivery companies Zomato and Swiggy hit record highs on Thursday after brokerages remained upbeat on the two companies.

The Zomato stock rose 6.3% in intraday trade today to hit a 52-week high of ₹304.50 on the BSE, taking the company’s market capitalisation to ₹2.9 lakh crore.

CLSA has an 'outperform' rating on Zomato. The foreign brokerage raised its target price to ₹370 per share.

Shares of newly listed Swiggy jumped as much as 11.3% to hit an all-time high of ₹576.95 on the BSE, taking the food ordering company’s market cap to ₹1.23 lakh crore. Homegrown brokerage Motilal Oswal said Swiggy's food delivery business is part of a "stable duopoly".

On Tuesday, the Bengaluru-based food tech giant reported a consolidated net loss of ₹625.5 crore for the second quarter of the ongoing fiscal, which narrowed marginally as compared with ₹657 crore in the year ago period. Revenue from operations grew 30% year-on-year to ₹3,601.4 crore in Q2 FY25, from ₹2,763.33 crore in the corresponding period last year.

Swiggy’s food delivery business turned profitable last year, driven by higher monetisation in advertising, reducing cost of delivery while maintaining delivery partner earnings and other variable costs by scaling technology-led interventions. “Profitability has also been enhanced by managing marketing and indirect costs, where absolute costs have reduced by 22% over the past two and a half years, while the GOV (gross order value) has grown by 41%. This has been the outcome of concerted efforts to simplify our tech-stack, cost-efficiencies in manpower and unlocking efficiencies in marketing spends by mining the benefits of our unified app,” says the company.

“Swiggy’s Food delivery business continues to gain strength every quarter, and our GOV has grown 5.6% QoQ in Q2FY25. The business has ramped up profitability significantly, with Adjusted EBITDA margins improving by nearly 1,000 bps over the past 2.5 years, to 1.6% in Q2FY25. This has been the result of consistent growth in users and their spends, a leap in restaurant advertising, concerted efforts on efficiency in fixed costs, substantial improvement in on-ground execution, and cost-efficient interventions into improving the customer experience. It has come in spite of significant competitive action on subscription programmes ramping-up, which had dragged growth for us in the second half last fiscal,” says Sriharsha Majety co-founder, managing director and Group CEO Swiggy.

On quick commerce platform Instamart, Majety says the company’s growing network of 609 dark stores has expanded to cover 44 cities as of September. “Swiggy Instamart is at an inflection point. The Quick-commerce category is expanding to more geographies, consumer shopping missions, and categories in retail. Over the past year, we have pivoted our network to larger and more optimised dark stores which now house nearly 3x the SKUs. We are increasing our store counts as well, and added 52 stores in Q2,” says Majety.

The Swiggy co-founder and MD says the company plans to double its store count by March 2025, while increasing the average size of its stores by 30-35%. “We are replacing some of our older, small-format stores (2,500-2,800 sq ft) with larger stores (3,500-4,500 sq ft) that can house up to 20K SKUs. Additionally, we are rolling out ‘megapods’ (8,000-10,000 sq ft) in top cities, which can house over 50K SKUs,” says Majety.