Brokerages Cut Target Prices as Quick Commerce Growth Slows and Profitability Concerns Persist

The stock declined nearly 7 per cent during intraday trade on the BSE, hitting a low of ₹261.20 per share. Although the stock recovered some losses later in the session, it continued to trade sharply lower amid broader market weakness and multiple brokerage target price cuts.

Analysts largely maintained positive long-term ratings on the company but reduced valuation targets due to concerns around intense competition, slower quick commerce expansion and delayed profitability timelines.

Swiggy Narrows Losses in Q4FY26

Swiggy reported a consolidated net loss of ₹800 crore for the March quarter, showing significant improvement compared to a loss of ₹1,081 crore in the same quarter last year.

Sequentially, the company also improved from a net loss of ₹1,065 crore reported in Q3FY26.

The company said stronger operational efficiency and improving contribution margins in its quick commerce business, Instamart, helped reduce losses during the quarter.

Meanwhile, total revenue for Q4FY26 rose sharply to ₹6,383 crore from ₹4,410 crore in the year-ago period, reflecting continued growth across food delivery and quick commerce operations.

Revenue also improved sequentially from ₹6,148 crore reported in the previous quarter.

Food Delivery Business Remains Strong

Several brokerages highlighted that Swiggy’s food delivery business continued to perform strongly during the quarter.

Gross order value (GOV) growth in the food delivery segment remained healthy, supported by rising monthly transacting users, faster deliveries and improved customer engagement.

Analysts noted that operational initiatives such as faster delivery formats, premium offerings and value-focused programs helped improve customer retention and order frequency.

Swiggy’s adjusted Ebitda margin in the food delivery segment also expanded during the quarter, reaching one of its highest levels so far.

Brokerages believe the food delivery business continues to remain Swiggy’s strongest and most stable segment amid growing competition in quick commerce.

Instamart Growth Slows Amid Competitive Pressure

While food delivery performance remained encouraging, Swiggy’s quick commerce arm Instamart witnessed slower-than-expected growth during the quarter.

Brokerages highlighted that quarter-on-quarter growth in gross order value and net order value for Instamart remained relatively muted compared to market expectations.

The company, however, continued improving contribution margins in the segment, with management reiterating its target of achieving contribution margin breakeven by Q1FY27.

Analysts believe the quick commerce market has become increasingly competitive as companies continue investing aggressively in customer acquisition, pricing and delivery infrastructure.

Several brokerages noted that Swiggy has chosen to focus on differentiated customer experience and operational efficiency rather than entering aggressive price wars.

Brokerages Trim Target Prices

Following the earnings announcement, several brokerage firms revised their valuation targets lower while retaining positive long-term ratings on the stock.

Nomura Cuts Target Amid Slower QC Growth

Nomura maintained its “Buy” rating but reduced the target price significantly.

The brokerage cited slower gross order value growth in quick commerce and reduced valuation multiples for the business as key reasons behind the downgrade in target price.

Nomura noted that while the current market valuation implies negative value for the quick commerce business, Swiggy must demonstrate a clearer path toward profitability for investor confidence to improve.

Emkay Sees Strong Food Delivery Momentum

Emkay Global Financial Services retained its positive view on Swiggy, highlighting strong execution in the food delivery segment.

The brokerage noted that while Instamart growth remained weaker than expected, contribution margins improved steadily during the quarter.

Emkay believes Swiggy’s food delivery business continues to show strong traction and margin expansion despite increasing competition in quick commerce.

Motilal Oswal Flags Delayed Profitability

Motilal Oswal Financial Services reduced its earnings estimates for FY27 and FY28, citing slower quick commerce growth and delayed profitability improvement.

The brokerage stated that Swiggy’s strong brand recall and leadership in food delivery remain valuable long-term assets. However, it emphasised that a sustainable path toward quick commerce Ebitda profitability will be critical for meaningful stock re-rating.

ICICI Securities Remains Optimistic Long Term

ICICI Securities also cut its target price but maintained a positive stance on the stock.

The brokerage expects Ebitda breakeven in quick commerce to take longer than previously estimated due to the company’s continued focus on expanding order volumes and market share.

However, ICICI Securities believes Swiggy still offers attractive long-term risk-reward potential given the growth opportunities in India’s online food delivery and quick commerce markets.

Quick Commerce Competition Intensifies

The Indian quick commerce industry has become one of the most competitive segments within the consumer internet space.

Companies are aggressively expanding dark store networks, investing in logistics and offering discounts to capture market share in the rapidly growing instant delivery ecosystem.

Analysts believe sustained competition may continue impacting profitability across the industry over the near term, even as demand for ultra-fast deliveries remains strong.

Swiggy’s ability to improve operational efficiency while balancing growth and profitability will remain a key focus area for investors.

Investors to Watch Profitability Path Closely

Going forward, investors are expected to closely monitor Swiggy’s progress toward profitability, especially within the Instamart business.

Key factors likely to influence stock performance include quick commerce growth trends, margin expansion, customer acquisition costs and overall competitive intensity in the sector.

Despite near-term challenges, analysts believe India’s digital consumption ecosystem and increasing online adoption continue to provide strong long-term growth opportunities for companies like Swiggy.