Why Is Bernstein Bullish on Swiggy and Eternal Amid AI Buzz?

Synopsis: Bernstein remains positive on Swiggy and Eternal despite rising AI buzz, stating that strong logistics infrastructure protects incumbents from disruption. With AI seen as an incremental demand driver and targets implying 45–60% upside, the broking maintains ‘Outperform’ ratings amid recent stock declines and sector volatility.

As artificial intelligence increasingly becomes part of the retail and e-commerce narrative, investors have questioned whether AI-led platforms could disrupt established food delivery and quick commerce players. Amid this backdrop, Bernstein has reiterated its positive stance on Swiggy and Eternal, arguing that technology alone cannot replace strong on-ground logistics capabilities. 

While both stocks have witnessed recent corrections, the broking believes the structural growth story remains intact. It views AI as a catalyst that can enhance efficiency and demand generation rather than a disruptive threat. With significant upside implied in their target prices, Bernstein maintains strong conviction in both companies.

AI to be a Catalyst, Not Disruptor

Bernstein expects Indian consumers to increasingly leverage AI-enabled applications in their shopping experience, especially in the areas of discovery, comparison, and convenience-driven purchases. However, Bernstein believes that AI-enabled platforms are unlikely to be a disruptor to the existing market leaders without robust logistics and fulfilment capabilities.

The broking firm believes that in the quick commerce and food delivery market in India, physical implementation capabilities such as warehousing, last-mile delivery, and supply chain capabilities continue to be an important competitive barrier. This means that AI-enabled platforms are more likely to drive incremental demand rather than disintermediate the market leaders.

Notably, the market leaders in India have already begun to integrate AI across both customer- and business-facing interfaces. From demand forecasting to personalisation and route optimisation, AI is being leveraged to improve efficiency and competitive advantage.

Stock Performance, Ratings & Upside Potential

Despite the recent downturn, with Swiggy down for the fourth consecutive day and Eternal down for the sixth consecutive day, Bernstein has reaffirmed its ‘Outperform’ rating on both stocks, with a target price of Rs 370 for Eternal and Rs 500 for Swiggy.

Going by the current market price, the target price set by the broking house translates to an upside potential of about 45% for Eternal and close to 60% for Swiggy, which is a clear indication of the broking house’s conviction in the stocks’ medium-term prospects.

Overall analyst opinion is also positive. Of the 33 analysts following Eternal, 30 have assigned a ‘Buy’ rating, while Swiggy has received 23 ‘Buy’ ratings out of a total of 28 analysts. Bernstein is of the view that while it is positive about the e-commerce sector in India, AI-driven stories could lead to short-term market volatility.

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