Swiggy reported a Q2 FY27 net revenue of Rs 7,570 crore vs brokerage's estimate of Rs 7,150 crore. The food delivery business's gross order value grew 17.7% YoY, whereas the contribution margin expanded 10 basis points QoQ to 7.7%. FD's adjusted Ebitda as a % of GOV margin expanded 30 bp QoQ to 3.4% vs Motilal Oswal's estimate of 3.3%. The brokerage continues to believe Swiggy's food delivery franchise and brand recall provide long-term strategic value. However, a clear path toward quick commerce Ebitda profitability remains critical for a meaningful re-rating.
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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has retained its Buy rating on Swiggy Ltd. following the company's second-quarter FY27 results but lowered its target price to Rs 280, citing slower growth in food delivery and quick commerce compared with rival Eternal, alongside a longer path to profitability for Instamart.
Despite the downward revision, the brokerage's target implies a potential 32% upside from its reference price of Rs 211.
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The brokerage continues to believe Swiggy's food delivery franchise and brand recall provide long-term strategic value. However, a clear path toward quick commerce Ebitda profitability remains critical for a meaningful re-rating.
The brokerage valued Swiggy's food delivery business at 32 times estimated FY28 enterprise value-to-EBITDA, while assigning a one-times FY28 enterprise value-to-sales multiple to its out-of-home, platform and supply-chain businesses. The quick-commerce business was valued using a discounted cash flow model.
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Swiggy Q2FY27 Results Highlights:
Swiggy reported a Q2 FY27 net revenue of Rs 7,570 crore (11.1%/36.1% QoQ/YoY) vs brokerage's estimate of Rs 7,150 crore.
The food delivery (FD) business's gross order value grew 17.7% YoY, whereas the contribution margin expanded 10 basis points QoQ to 7.7%.
FD's adjusted Ebitda as a % of GOV margin expanded 30 bp QoQ to 3.4% vs Motilal Oswal's estimate of 3.3%.
Instamart's GOV was Rs 9,230 crore (up 31.4% YoY) vs estimate of Rs 9,050 crore.
Instamart reported a contribution margin of -1.0% (-0.2% in Q4). Adjusted Ebitda as a % of net order value was -13.7% (-13.2% in Q1) vs estimate of -12.8%.
Overall, Swiggy reported a net loss of Rs 920 crore against estimate of 850 crore.
For H1 FY27, Swiggy's revenue grew 36.7% YoY and adj. Ebitda losses reduced from Rs 1,500 crore in H1 FY26 to Rs 1,400 crore.
For H2 FY27, Motilal Oswal expects its revenue to grow 27.6%, while the adjusted Ebitda loss is likely to increase from Rs 1,360 crore to Rs 1,490 crore.
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