Labour Ministry Directs Quick-Commerce Players to Remove 10-Minute Delivery Threshold
Shares of Zomato and Swiggy have become a key market focus after the Labour Ministry directed quick-commerce players to remove the 10-minute delivery threshold. This move is expected to have a significant impact on the food delivery industry in India, with both companies’ share prices already reacting to the news.
Shares of Swiggy are trading at Rs 346.6, correcting around one percentage point, while Zomato shares are trading with gains of around 2.5% at Rs 292, although it is well below the intraday high of Rs 297. The news has brought the focus back on the food delivery industry in India, with investors closely watching the developments.
Implications of the Labour Ministry’s Directive
The Labour Ministry’s directive is aimed at prioritizing the safety of delivery partners, who have been under pressure to deliver food within a short timeframe. This move is expected to lead to changes in the business models of food delivery companies, which may have to reassess their logistics and delivery strategies.
The Social Security Code 2020 has also proposed a 90-day annual work threshold as the mandatory eligibility criteria for gig and platform workers to access social security. This move is expected to have a significant impact on the gig economy in India, with food delivery companies likely to be affected.
Analyst Ratings and Price Targets
Out of 33 analysts tracking Eternal, 29 maintain a ‘buy’ rating, while four suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target implies an upside of almost 30%. As for Swiggy, out of 28 analysts tracking the company, 24 maintain a ‘buy’ rating, two recommend a ‘hold,’ and two suggest ‘sell,’ according to Bloomberg data. The average 12-month consensus price target implies an upside of 41%.
Investors can stay updated with the latest stock market news in India and get insights into the Indian stock market trends to make informed investment decisions.
What Does This Mean for Investors?
The Labour Ministry’s directive is a significant development for investors in the food delivery industry. With the focus on safety and social security, companies like Zomato and Swiggy may have to reassess their business models and logistics strategies.
Investors should keep a close eye on the developments in the food delivery industry and stay updated with the latest stock market updates in India. They can also explore other investment opportunities in the Indian stock market, including Nifty index and Sensex index.