Eternal, Swiggy, and Devyani International Shares Experience Decline of Up to 4% Amid Market Volatility

Food Delivery and Restaurant Firms Decline Amid Global Tensions

Shares of food delivery and restaurant firms fell in Monday's trade, with Swiggy leading the decline.

Swiggy shares dropped 4.42 percent to an intraday low of Rs 262.85 per share on the National Stock Exchange (NSE). The stock had opened lower by 3.2 percent. This decline came amid renewed tensions in West Asia and uncertainty over the opening of the Strait of Hormuz following inconclusive Iran-US peace talks, which led to a surge in crude oil prices. Higher fuel costs can raise logistics and delivery expenses, while elevated input costs for restaurants may weigh on margins, impacting related stocks.

The fall also follows the company's announcement on Friday that co-founder Nandan Reddy has stepped down as whole-time director and head of innovation. The company said he will relinquish his board position to pursue other professional interests. Swiggy said its board has approved the appointment of Renan De Castro Alves Pinto as nominee director, succeeding Roger Rabalais, representing Prosus Ventures. It also approved the appointment of co-founder and chief growth officer Phani Addepalli and group chief financial officer Rahul Bothra as additional directors with effect from June 1.

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Meanwhile, shares of Eternal declined 2.37 percent to Rs 234.53 apiece on the NSE after opening 2.18 percent lower. Quick service restaurant and franchise operators also traded in the red.

The ongoing conflict in West Asia has triggered a shortage of liquefied petroleum gas (LPG) in India, following disruption in the Strait of Hormuz, a key maritime route through which a large share of the country's LPG imports pass. Any disruption in LPG supplies could affect operations of a majority of restaurants, as most rely on it as their primary cooking fuel.

According to the US Central Command, the blockade would be enforced against vessels entering or departing Iranian ports and coastal areas, while ships travelling between non-Iranian ports would be allowed to transit through the Strait of Hormuz.

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