Shares of Indian food delivery platforms and restaurant operators declined as concerns grew that disruptions to cooking gas supplies could affect restaurant operations and online order volumes.
The decline comes amid fears that escalating tensions in the Middle East could trigger a cooking-gas shortage in India, which relies heavily on energy imports from the region.
Food delivery firms including Swiggy and Eternal Ltd., the parent company of Zomato, came under selling pressure as investors assessed the potential impact of fuel shortages on the broader food-service ecosystem.
Food delivery stocks slide amid gas shortage concerns
Shares of Eternal Ltd. fell as much as 4.8% although it has pared some losses to 0.59%, while Swiggy was trading down 0.74% after falling a similar margin.
Quick-service restaurant (QSR) operators also faced pressure.
Jubilant Foodworks Ltd., which operates Domino’s Pizza and Dunkin’ Donuts in India, declined, while other restaurant companies also saw their shares fall.
In the QSR segment, Sapphire Foods India Ltd., a franchisee of Yum! Brands’ KFC and Pizza Hut, dropped 1.7%. Restaurant Brands Asia Ltd., which operates Burger King outlets in India, fell 1.27%.
Westlife Foodworld Ltd., the operator of McDonald’s outlets in western and southern India, slipped 2.6%.
Devyani International Ltd., which runs KFC, Pizza Hut and Costa Coffee franchises in India, was an exception and rose 3%.
Restaurants warn of operational disruptions
Restaurants across several major cities have warned that shortages of commercial LPG cylinders could disrupt operations.
Industry participants say many restaurants may need to shorten operating hours or reduce menu offerings if gas supplies remain tight.
A Motilal Oswal report said, “Reduced menus, limited cooking hours or temporarily shut kitchens at some restaurants may limit order availability on platforms, leading to temporary moderation in fourth-quarter food delivery order volumes.”
Brokerage Elara Capital also flagged the risk to delivery platforms.
“Constrained cooking fuel availability could reduce restaurant operating capacity and affect order fulfilment on food delivery platforms,” said Karan Taurani, senior vice-president at Elara Capital.
According to the brokerage, nearly 28% of gross order value (GOV) across food delivery platforms could be exposed if LPG shortages persist, as a significant portion of orders originates from independent restaurants that depend on gas-based cooking.
Industry estimates suggest India’s food-service sector includes nearly five lakh restaurants employing more than 8.5 million people.
About 80% of kitchens rely on LPG, making the industry vulnerable to disruptions in supply.
Restaurants in cities including Bengaluru, Mumbai, Chennai and Kolkata have already reported shortages of commercial LPG cylinders.
Electric cooking appliance makers surge
While food delivery companies declined, manufacturers of electric cooking appliances gained as consumers rushed to secure alternatives.
TTK Prestige Ltd. jumped as much as 15%, extending its three-day rally to nearly 30%.
Panic buying has increased demand for induction cooktops and other electric cooking solutions as households and businesses prepare for possible gas shortages.
The pressure on cooking gas supplies comes after India raised prices for its most widely used LPG cylinder for the first time in almost a year.
The price of a 14.2 kilogram cylinder rose 7% to 913 rupees ($9.9).
Prices for commercial LPG used by restaurants and hotels were also increased for a second time in March.
Despite market concerns, India’s petroleum minister Hardeep Singh Puri sought to reassure consumers about energy supplies.
“India’s energy imports are continuing to flow in from different sources and routes. We have taken steps to ensure that 100% supply of CNG and PNG to domestic consumers is maintained, while other industries continue to receive 70–80% of their supplies despite the war situation,” Puri said.
“We are committed to ensuring uninterrupted supply of affordable energy to our domestic consumers. There is no shortage for domestic consumers and no reason to panic,” he added.
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