Eternal, Swiggy In Focus As Morgan Stanley Slashes Targets For India's Darling Internet Stocks

Morgan Stanley has cut price targets across a clutch of India’s listed internet and technology names like Delhivery, Eternal, Swiggy, and Make My Trip. The brokerage has cautioned that the earnings downgrade cycle is far from over amid slowing growth, rising competition and margin pressures. In a recent research note, the global brokerage said it expects further consensus estimate cuts across its coverage universe, even as valuations for select stocks begin to look reasonable.

The brokerage lowered its price target on Delhivery to Rs 445 from Rs 450, Swiggy to Rs 414 from Rs 455, and Eternal to Rs 417 from Rs 427. MakeMyTrip also saw a sharp cut, with the target lowered to $113 from $178.

For the December quarter (Q3FY26), Morgan Stanley expects momentum in quick commerce to moderate. Net order value growth is seen slowing quarter-on-quarter to around 16% for Eternal and 13-14% for Swiggy, compared with much stronger growth in the previous quarter. While adjusted EBITDA losses as a proportion of gross order value should improve sequentially, losses remain large in absolute terms — estimated at Rs 1,400 crore for Eternal and Rs 890 crore for Swiggy.

The brokerage has trimmed its QComm estimates and reiterated its preference for Eternal over Swiggy, citing stronger execution and continued relative market share gains.

In online travel, MakeMyTrip is expected to deliver steady growth but at the cost of margins. Adjusted revenue growth is pegged at about 19% year-on-year in constant currency terms.

However, higher advertising and marketing spends—rising to about 5.2-5.3% of gross bookings — are likely to drag adjusted EBIT margins to 16.6%, down from 17% a year ago. As a result, Morgan Stanley has built in a more gradual margin recovery and cut its adjusted EBIT estimates for FY27 and FY28 by around 5% each.

Logistics player Delhivery continues to see robust volumes, with express parcel growth estimated at 35.5% year-on-year and revenue growth accelerating to 18%. However, higher costs linked to regulatory changes and investments in new segments have prompted the brokerage to trim EBITDA forecasts across FY26-FY28.

Beyond these, Morgan Stanley flagged sustained growth at Blackbuck and steady expansion at Urban Company, while cautioning that regulatory changes around gig workers and intensifying competition could weigh on profitability across the sector.