UBS has revised its outlook on India's food delivery and quick‑commerce sector, trimming price targets for market leaders Eternal and Swiggy amid rising competitive pressures and heightened discounting. UBS maintained its "Buy" ratings on both companies but cut Eternal's target price to Rs 375 from Rs 400 and Swiggy's to Rs 510 from Rs 580.
The adjustment comes as UBS asks a key question for investors, which is will quick commerce margins turn the corner in FY27? While the longer-term direction remains positive, UBS believes the timing of recovery has been pushed back.
The brokerage flagged that competition has intensified in quick commerce in recent months, leading to higher discounting across the category. Even so, UBS noted that network expansion is continuing, suggesting the battle is being fought not just on pricing but also on delivery reach, dark store footprint, and speed of service. That combination, UBS implied, is likely to weigh on profitability before it improves.
UBS also said that food delivery growth is improving and competition remains broadly stable, even as quick commerce faces turbulence. Swiggy Instamart on Monday scrapped its '10-minute' delivery branding amid rising pressure from the government and labour rights groups on the welfare and safety of delivery personnel.
UBS cut Eternal's quick commerce adjusted EBITDA estimates for FY26–27 by 15–20%. For Swiggy, it expects a slower margin trajectory as well, reducing quick commerce margin assumptions by 100–120 basis points for FY26–27.
It should be noted that a recent Goldman Sachs report estimated the quick commerce total addressable market (TAM) in India's top 150 cities at USD 235 billion. It forecasts the quick commerce industry to grow at a 35-40% CAGR (FY25-FY30) to reach USD 47 billion by FY30. According to the report, India's quick commerce industry has 65-75 million monthly transacting users (MTUs).
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