Latest news with #RahulMalhotra
Time of India
2 days ago
- Business
- Time of India
Rapido's food delivery entry unlikely to dent duopoly, say brokerages
Rapido's foray into food delivery through a pilot in Bengaluru is unlikely to materially disrupt the entrenched duopoly of Zomato and Swiggy, multiple brokerages said in separate notes, citing the operational complexity, capital intensity and customer experience challenges inherent to the business. TOI reported on Monday, Bengaluru-based Rapido is currently preparing to launch its food delivery service with a fundamentally different pricing structure, choosing flat fees over traditional percentage commissions charged to restaurants. The move positioned the ride-hailing firm as a challenger to Zomato and Swiggy at a time when small restaurant owners are increasingly vocal about rising aggregator costs. Rapido plans to charge a fixed Rs 25 on food orders below Rs 400 and Rs 50 for those above. These charges are flat fees deducted from the order value, paid by the restaurant to Rapido. Bernstein's Rahul Malhotra noted that while Rapido plans to leverage its over 3 million rider base and charge lower take rates, 'new entrants have been unsuccessful in the past.' Malhotra cited prior attempts by Amazon, Ola and ONDC that failed to scale due to limited restaurant selection, fragmented supply, and weak customer experience. He added that India's food delivery market, dominated by Zomato and Swiggy with 54 per cent and 46 per cent market shares respectively, has become operationally complex with over 200,000 to 300,000 restaurants, posing high barriers to scale for new players. Elara Capital's Karan Taurani acknowledged Rapido's cross-utilisation model, where its rider network may reduce incremental capital expenditure. However, Taurani warned that 'the absence of a dedicated fleet may compromise the delivery experience, especially with rising sub-30 minute delivery expectations.' Elara's sensitivity analysis suggested that even a moderate impact from Rapido could lead to a 6 per cent cut in the target price of Eternal (Zomato), should revenue growth or valuation multiples weaken due to pricing pressures. HSBC analysts Yogesh Aggarwal, Prateek Maheshwari and Sagar Desai pointed out that while the underlying cost structures of two-wheeler ride-sharing and food delivery are similar, scaling food delivery demands sustained execution. They argued that "customer experience, ability to execute, and achieving scale remain key challenges" for Rapido. The analysts also flagged that long-term industry growth is already moderating, with most of the incremental demand expected to come from higher order frequencies rather than significant customer base expansion. Kotak Institutional Equities, in its sector alert, described Rapido's entry as having 'no immediate impact' on the incumbents. It reiterated that Zomato and Swiggy have built significant operational moats in logistics, customer loyalty, and dense restaurant partnerships, making material share shifts unlikely in the near term.
Time of India
3 days ago
- Business
- Time of India
Rapido's food delivery entry unlikely to dent duopoly, say brokerages
Rapido's foray into food delivery through a pilot in Bengaluru is unlikely to materially disrupt the entrenched duopoly of Zomato and Swiggy, multiple brokerages said in separate notes, citing the operational complexity, capital intensity and customer experience challenges inherent to the business. TOI reported on Monday, Bengaluru-based Rapido is currently preparing to launch its food delivery service with a fundamentally different pricing structure, choosing flat fees over traditional percentage commissions charged to restaurants. The move positioned the ride-hailing firm as a challenger to Zomato and Swiggy at a time when small restaurant owners are increasingly vocal about rising aggregator costs. Rapido plans to charge a fixed Rs 25 on food orders below Rs 400 and Rs 50 for those above. These charges are flat fees deducted from the order value, paid by the restaurant to Rapido. Bernstein's Rahul Malhotra noted that while Rapido plans to leverage its over 3 million rider base and charge lower take rates, 'new entrants have been unsuccessful in the past.' Malhotra cited prior attempts by Amazon, Ola and ONDC that failed to scale due to limited restaurant selection, fragmented supply, and weak customer experience. He added that India's food delivery market, dominated by Zomato and Swiggy with 54% and 46% market shares respectively, has become operationally complex with over 200,000 to 300,000 restaurants, posing high barriers to scale for new players. Elara Capital's Karan Taurani acknowledged Rapido's cross-utilisation model, where its rider network may reduce incremental capital expenditure. However, Taurani warned that 'the absence of a dedicated fleet may compromise the delivery experience, especially with rising sub-30 minute delivery expectations.' Elara's sensitivity analysis suggested that even a moderate impact from Rapido could lead to a 6% cut in the target price of Eternal (Zomato), should revenue growth or valuation multiples weaken due to pricing pressures. HSBC analysts Yogesh Aggarwal, Prateek Maheshwari and Sagar Desai pointed out that while the underlying cost structures of two-wheeler ride-sharing and food delivery are similar, scaling food delivery demands sustained execution. They argued that "customer experience, ability to execute, and achieving scale remain key challenges" for Rapido. The analysts also flagged that long-term industry growth is already moderating, with most of the incremental demand expected to come from higher order frequencies rather than significant customer base expansion. Kotak Institutional Equities, in its sector alert, described Rapido's entry as having 'no immediate impact' on the incumbents. It reiterated that Zomato and Swiggy have built significant operational moats in logistics, customer loyalty, and dense restaurant partnerships, making material share shifts unlikely in the near term. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
&w=3840&q=100)
Business Standard
3 days ago
- Business
- Business Standard
Rapido pilots food delivery in Bengaluru; analysts see limited impact
As mobility platform Rapido begins piloting a food delivery service in Bengaluru, analysts expect limited disruption to India's entrenched food delivery giants. According to a recent report by Bernstein, the market remains a tight duopoly, with Zomato holding approximately 54 per cent share and rival Swiggy at 46 per cent. While Swiggy has shown stronger year-on-year growth in gross order value (GOV), the US-based asset manager does not foresee Rapido's entry shifting the balance in the near term. 'We don't anticipate material market share impact from Rapido's entry,' said Rahul Malhotra, an analyst at Bernstein, noting that the service remains in its early pilot phase. Rapido, which provides bike and taxi services, has announced plans to enter the food delivery business with a pilot launch in Bengaluru. The firm, which has raised about $600 million, plans to leverage its rider base (over 3 million) and charge lower take rates of 8–15 per cent. In comparison, Zomato and Swiggy take rates are higher at 18–20 per cent, according to the Bernstein report. India's food delivery space has previously seen several entrants attempt to grow the restaurant base by offering lower take rates. These include Amazon, Ola, and ONDC. However, most failed to scale due to limited selection, poor customer experience, and operational complexity. Food delivery remains a challenging business. Online food aggregators must negotiate take rates with approximately 300,000 restaurants. India's market is highly fragmented—only 10 per cent of GOV comes from QSRs (quick service restaurants), with the remainder from smaller restaurants—making scale difficult and favouring incumbents. The Bernstein report noted that at low contribution margins, the flywheel effect fails. The average delivery cost per order is ₹50–60, so an 8–15 per cent take rate on a ₹400–500 order generates very low profitability, leaving little room for reinvestment or expansion into Tier 2 cities, where penetration is lower but growth potential higher. Rapido could expand the restaurant pool (currently 300,000–400,000, with potential for over 1 million) by attracting lower AOV (average order value) restaurant outlets in Tier 2 and smaller markets. These outlets have not been viable for Zomato and Swiggy. 'We believe the ability to operate at low take rates will be difficult for Rapido,' said Malhotra in the report. 'Eventually, it will have to increase take rates to sustain.' The report also noted that Rapido remains an unprofitable business. Notably, Swiggy is an investor and holds a 12–13 per cent stake in the company. Bernstein continues to favour Zomato as its top pick, citing strong execution and growth in quick commerce. It also rated Swiggy as 'outperform', expecting the company to remain a key player in India's expanding convenience economy. Swiggy's food delivery GMV grew 18 per cent year-on-year in Q4FY25, compared to 16 per cent for Zomato. Swiggy's GOV growth has trended higher on a year-on-year basis over the past two quarters. Management also saw good traction in the 10-minute delivery service Bolt, which is available in 500 cities and accounts for 12 per cent of total food delivery orders. Zomato remains stronger on the supply side. Its average monthly restaurant partners stood at around 314,000 in Q4FY25, compared to 252,000 for Swiggy. Bernstein said Rapido would face difficulties negotiating with the over 500,000 restaurants currently associated with the two incumbents. HSBC, in a recent note, said the unit economics of two-wheeler ride-hailing are on par with food delivery, but warned that customer experience, operational execution, and scaling remain formidable challenges. The bank added that while newer players may tap into lower-margin segments, they are unlikely to meaningfully disrupt the dominance of market leaders. Separately, Kotak Institutional Equities reportedly said Rapido would need to invest aggressively in discounts and technology to gain a foothold in the food delivery business. With Zomato and Swiggy already deeply embedded in the restaurant and consumer networks, Kotak said the competitive threat posed by Rapido remains minimal. Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd
Business Insider
02-05-2025
- Business
- Business Insider
KPIT Technologies Limited (KPITTECH) Receives a Buy from Bernstein
In a report released on April 29, Rahul Malhotra from Bernstein maintained a Buy rating on KPIT Technologies Limited (KPITTECH – Research Report), with a price target of INR1,400.00. The company's shares closed last Wednesday at INR1,253.60. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. According to TipRanks, Malhotra is an analyst with an average return of -2.7% and a 40.00% success rate. In addition to Bernstein, KPIT Technologies Limited also received a Buy from J.P. Morgan's Bhavik Mehta in a report issued on April 28. However, on April 29, ICICI Securities maintained a Sell rating on KPIT Technologies Limited (NSE: KPITTECH). Based on KPIT Technologies Limited's latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of INR13.65 billion and a net profit of INR2.04 billion. In comparison, last year the company earned a revenue of INR10.98 billion and had a net profit of INR1.34 billion
