Swiggy's Tale of Two Businesses: Brokerages Split Between Strong Food Delivery, Instamart Concerns In Q4

Swiggy's March quarter drew a mixed response from brokerages, with strong momentum in the core food delivery business offset by a sequential slowdown in quick commerce. Gross revenue rose 44.7% year-on-year to Rs 6,383 crore, while the adjusted EBITDA loss narrowed to Rs 697 crore from Rs 962 crore a year earlier.

Food delivery continued to outperform, with order growth aided by new offerings such as Bolt and One BLCK, but Instamart's growth moderated and losses in the quick commerce business are expected to remain elevated. Management reiterated its long-term target of 18–20% growth and a medium-term goal of Rs 1 trillion in gross order value with a 3–4% EBITDA margin.

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Here's what brokerages had to say:

Macquarie on Swiggy

• Macquarie upgrades Swiggy to Neutral.
• The stock has corrected around 30% from its IPO levels, prompting the upgrade.
• Food delivery momentum has improved.
• Instamart growth moderated sequentially.
• Dark store additions remained muted at 7 stores versus Blinkit's 216, taking the total network to around 1,140 stores.
• Management maintained its long-term food delivery growth guidance of 18–20% CAGR.
• Quick commerce losses are expected to remain elevated.

Nomura on Swiggy

• Nomura maintains a Buy rating but cuts the target price to Rs 473 from Rs 546.
• Food delivery delivered a strong performance, while quick commerce margins improved gradually.
• The company remains well funded to navigate near-term challenges.
• Growth is being supported by innovations such as Bolt, One BLCK and the 99-store model.
• Quick commerce growth has slowed as management avoids irrational competition.
• Food delivery is expected to generate Rs 1,400–2,200 crore of free cash flow in FY27–28.
• The medium-term target is Rs 1 trillion of GOV with 3–4% EBITDA margins.
• Nomura believes the stock undervalues the quick commerce opportunity, though profitability execution remains critical.

UBS on Swiggy

• UBS maintains a Buy rating with a target price of Rs 390.
• Q4FY26 results were mixed, with strong food delivery offset by weaker quick commerce.
• Food delivery GOV grew 23% YoY, ahead of expectations.
• Management reiterated food delivery growth guidance of 18–20% and a medium-term EBITDA margin target of around 5%.
• The company expects contribution margin breakeven in quick commerce by Q1FY27.
• Capex is likely to decline in FY27 after significant investments over the last two years.

Citi on Swiggy

• Citi maintains a Buy rating and cuts the target price to Rs 415 from Rs 450.
• Execution remains on track, with steady improvement in core operating metrics.
• Contribution margins improved sequentially across businesses.
• Food delivery momentum remains strong, supported by operating leverage and better execution.
• Quick commerce metrics and dark store economics continue to improve.
• Cash burn remained stable.

Morgan Stanley on Swiggy

• Morgan Stanley maintains an Equal-weight rating and raises the target price to Rs 322 from Rs 319.
• Food delivery market share gains were marginal.
• Quick commerce experienced a sharper slowdown, with weaker order growth and softer active customer trends.
• Management indicated that contribution margin breakeven in quick commerce is unlikely in the near term.
• Food delivery remained steady, with continued improvement in GOV growth and adjusted EBITDAR margins.

Jefferies on Swiggy

• Jefferies maintains a Buy rating and cuts the target price to Rs 415 from Rs 440.
• The positive stance is based primarily on valuation comfort.
• Food delivery growth exceeded management guidance.
• The company reiterated 18–20% GOV growth guidance and around 5% adjusted EBITDA margins for food delivery.
• Management did not provide clear EBITDA breakeven guidance for quick commerce given uncertainty around market structure.
• Instamart is operating 1,143 stores at roughly 40% utilisation.
• The stock may remain range-bound until there is clearer visibility on quick commerce profitability.

ALSO READ: Swiggy Q4 Results: Net Loss Narrows, Revenue Jumps 45%

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