According to Bernstein, Blinkit has the ability to maintain its leading position and believes the current price offers a more favorable risk-reward proposition given its established positive contribution margin, better operating metrics across the board and much lower cash burn. The brokerage believes that most of the competitive pressure and resulting impact is already priced into the shares.
For Swiggy, longer term, Bernstein remains bullish on its ability to deploy a larger cash cushion to scale its dark store network, improve operating metrics and strengthen unit economics. Bernstein maintains its Outperform rating and forecasts an upside of 42% (target price of Rs 500) from current levels.
Here’s what the brokerage says about the ever-evolving space.
Swiggy and Zepto are close behind By 2025, the performance gap between leaders (Blinkit, Instamart, Zepto) and challengers Flipkart, Amazon, BigBasket and JioMart grew significantly. But things will be different in 2206, Berstein says. He adds that leaders’ collective focus on core customer cohorts to “lock down” unit economics and attempts by challengers to gain a foothold before it is “too late” would heat up the battle. As a result, analysts are suggesting aggressive discounting in the first half of 2026 and store expansions across the board.
QC in 2026
Rapid trade growth is expected to remain strong, with the industry expected to grow by around 80% by 2026, driven by continued dark store additions, deeper discounts and broader category offerings. While customer use cases remain largely similar across platforms, the three market leaders have developed increasingly differentiated strategies in 2025. Bernstein believes that strategic positioning, capital allocation – including the ability to absorb short-term losses – and execution will be key in determining the winners. It also expects the wide gaps in market estimates to narrow over the course of 2026, with Blinkit likely to continue to outgrow Instamart and Zepto.
Margins difficult to predict
Bernstein expects margin trajectories in high-speed trading to remain choppy and difficult to predict as Eternal and Swiggy enter 2026 with strong cash positions and competitive intensity that shows no signs of easing. With the focus firmly on defending and increasing market share in micro markets, players are likely to sacrifice margins in response to competitive pressure. The brokerage signals a limited view of margins above one or two quarters, given the need to respond quickly to rivals’ moves.
How should investors experience 2026?
For investors, Bernstein describes this as a tricky phase for fast trading. It recommends buying the sector with conviction over the long term, noting that the profitable, serviceable market remains large and that per-store operating numbers are more meaningful indicators of leadership than overall size. The broker expects Blinkit to remain the market leader, but warns investors to be prepared for a volatile year. It highlights key monitorables including Zepto’s IPO filing and milestones, growth initiatives at JioMart, consistency in execution at BigBasket, and the pace of aggression and capital allocation by Flipkart and Amazon. With Instamart also likely to drive growth following its recent capital increase, Bernstein expects continued pressure on customer acquisition. Overall, the brokerage views fast trading as a new and improved retail format rather than a platform business, making unit economics trajectory the key valuation factor.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
#Bernstein #picks #Eternals #Blinkit #surpass #Swiggy #Zepto #brace #volatility