Shares of India’s food delivery platforms and restaurant operators tumbled as an escalating Iran war triggered an LPG shortage, paralysing the $335-billion food & beverage industry.
Zomato parent Eternal Ltd. fell as much as 4.8% in Mumbai trading, while Swiggy Ltd. hit a record low as investors priced in a sharp contraction in order volumes. The sell-off extended to fast-food majors like Jubilant Foodworks Ltd., which operates Domino’s Pizza in India, as the sector grapples with an acute LPG shortage to keep commercial kitchens firing.
LPG shortage in India
The crisis stems from disruptions in West Asia, a region that provides more than half of India’s LPG imports. Logistics have been severely hampered by the closure of key maritime chokepoints, including the Strait of Hormuz, following escalations between Israel-US and Iran.
With tankers unable to pass through the corridor, Indian hospitality bodies in major hubs like Mumbai, Bengaluru, and Chennai have warned that up to 50% of restaurants could be forced to shut within days. Already, some establishments have begun reducing operating hours and stripping “slow-cooking” items from menus to conserve dwindling reserves.
“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,” Motilal Oswal analysts including Abhishek Pathak wrote in a research note.
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TTK Prestige, Stove Kraft emerge outliers
While the delivery and restaurant sectors bled, the LPG shortage in India has created an unexpected windfall for manufacturers of electric appliances. Panic buying has gripped Indian households and small eateries, driving a massive surge in demand for induction cooktops and pressure cookers.
TTK Prestige Ltd. saw its shares jump as much as 15% on Thursday, bringing its three-day gains to nearly 30%. Stove Kraft Ltd. also advanced as much as 12%. Quick-commerce platforms like Blinkit and Zepto have reported that induction stoves are selling out within minutes as consumers look for ways to bypass the gas-dependent supply chain.
LPG Cylinder Price Hike, New Policy
In an effort to manage the LPG shortage, the central government has invoked the Essential Commodities Act, 1955, ordering domestic refineries to prioritise LPG production for households over industry. However, this has further squeezed the “commercial” LPG supply used by the hospitality industry.
On Saturday, India raised LPG cylinder prices for the first time in nearly a year, increasing rates by 7% to ₹913. Commercial rates—which are typically more volatile—were hiked for the second time this month, adding an inflationary burden to a sector already reeling from supply constraints.
Analysts at CLSA noted that while the government is scrambling to find alternative suppliers, significant relief may not arrive until late April. For Swiggy and Eternal, which rely on a friction-less ecosystem of thousands of operational kitchens, the coming weeks represent a significant test of resilience in the face of geopolitical volatility.
