Eternal, Swiggy Share Price Drop Over 5% as LPG Shortage Threatens Food Delivery Business

Eternal, Swiggy Share Price Slides Amid Supply Concerns

Shares of Eternal were trading nearly 3.6% lower at ₹215.72 on the NSE, after falling as much as 4.7% in early trade. Meanwhile, Swiggy shares slipped around 2.76% to ₹276.75 after touching a 52-week low of ₹271.10, compared with the previous close of ₹284.60. The stock later recovered slightly and traded near ₹275 around 9:45 AM.

The sell-off came as the supply of commercial LPG cylinders tightened across several cities due to disruptions linked to the ongoing conflict involving the US, Israel and Iran, which has affected energy shipments passing through the Strait of Hormuz.

LPG Supply Disruption Raises Industry Concerns

India is heavily dependent on the Middle East for LPG imports, with around 90% of supplies coming from countries such as Qatar, Saudi Arabia, the UAE, and Kuwait. Industry estimates indicate that 80% of India’s LPG imports transit through the Strait of Hormuz, making the fuel particularly vulnerable to geopolitical disruptions. By comparison, 50% of LNG imports and 40% of crude oil imports pass through the same route.

Restaurant Operations Under Pressure

The LPG shortage has started affecting restaurants that rely heavily on commercial cylinders for cooking. A small restaurant typically consumes 1 to 2 commercial cylinders (19 kg) per day, while mid-sized restaurants use 3 to 5 cylinders daily, and large hotel kitchens consume 6 to 10 cylinders per day.

Most restaurants maintain only 2 to 6 days of cylinder inventory due to storage constraints. 

Risk to Food Delivery Platforms

Food delivery platforms like Eternal and Swiggy are indirectly exposed to the crisis because their business depends on restaurants remaining operational. If restaurants reduce cooking hours, limit menus, or temporarily shut kitchens due to LPG shortages, the number of available orders on these platforms could decline.

Growth Momentum Before the Crisis

Before the LPG supply disruption, the food delivery sector had been witnessing steady growth. Year-on-year platform GOV growth for Zomato stood at 15.9%, 16.2%, 18.6%, and 21.1% over the last four quarters. Swiggy recorded GOV growth of 17.6%, 18.8%, 18.8%, and 20.5% during the same period.

Wider Impact Across Restaurant Industry

The LPG shortage has also impacted restaurant operations across multiple cities. According to the Federation of Hotel and Restaurant Associations of India, hotels and eateries in Mumbai may have to shut operations within two days if supplies are not restored.

FHRAI Vice President Pradeep Shetty said severe shortages have already been reported in Mumbai, Pune, Aurangabad, Nagpur, Delhi, Karnataka, Telangana, and Andhra Pradesh. The supply situation has worsened over the past week, with intermittent disruptions escalating into near-complete supply halts in several regions since Monday.

The government has also revised the priority order for allocating domestically produced natural gas, placing LPG production along with CNG and piped cooking gas at the top of the priority list. This shift has further tightened supplies for hotels and restaurants that rely on market-priced commercial LPG.

Outlook

If the disruption continues through March, the crisis will begin reflecting in lower restaurant activity and temporary declines in food delivery order volumes in the fourth quarter, making investors closely monitor the duration of the supply disruption and its impact on the sector.