India’s food delivery industry is poised for a steady growth trajectory of 13 to 14 percent over the next few years, as per a fresh analysis by HSBC Global Investment Research. This growth forecast is backed by a moderation in competitive intensity within the quick commerce space, alongside a strategic pivot by leading companies toward asset optimisation and customer retention.
HSBC’s assessment notes that, although capital availability remains strong across players, the incremental returns on heavy cash burn strategies are diminishing. As a result, businesses are prioritising utilisation of existing infrastructure and maintaining loyalty among users acquired in earlier phases.
The report suggests a stable-state EBITDA margin of 5 percent for the food delivery sector, indicating gradual but tangible progress in profitability. Zomato, one of the market leaders, has seen valuation momentum supported by a duopoly-like industry structure and minimal reinvestment requirements. HSBC applies an EV/EBITDA target multiple of 40x for Zomato, arguing that on a price-to-earnings basis, the company currently trades cheaper than its peer group in the consumer discretionary segment, where multiples range from 15x to 60x.
Variable costs such as picker and delivery partner salaries have risen in recent quarters, but cost trends in dark stores have stabilised. Corporate expenses—including management and technology overheads—are about 5 percent of gross order value (GOV) today and are expected to fall to around 2 to 3 percent within four to five years as operational scale increases.
The report observes that near-term growth should remain robust, supported by improved unit economics and strategic consolidation. The quick commerce segment, which previously saw aggressive expansion and marketing spend, is now entering a phase of disciplined execution and financial moderation.
India’s food delivery ecosystem continues to evolve as one of the fastest-growing components of the broader consumer services industry. With structural efficiencies and sharper financial modelling, companies are now better positioned to convert scale into sustainable gains. The findings reaffirm investor confidence in the sector’s profitability potential as digital consumption deepens and user behaviour matures.
