Swiggy shares crack 8% as QC burns weight on outlook, bottomline; analysts cut targets

Shares of Swiggy Ltd tumbled as much as 8 per cent during the trading session on Friday as the stock tumbled down to Rs 302.25 amid weak quarterly earnings, which has led to price target cuts from the analysts with muted outlook over its growth. The stock had closed at Rs 327 in the previous session. Valuation support exists, but re-rating hinges on clearer profit visibility.

Swiggy reported widening of its net loss at Rs 1,064 crore, while revenue grew 54 per cent YoY to Rs 6,148 crore for October-December 2025 period. The food delivery platform's operational loss increased to 782 per cent, while instamart added 37 dark stores during the quarter.

According to the brokerage firms, Swiggy’s outlook remains mixed as steady food delivery growth and improving margins are offset by slower quick commerce expansion amid intense competition. Target prices have been cut due to higher losses and lower long-term margin assumptions, though profitability is expected to improve gradually with losses peaking and breakeven targeted by Q1FY27.

Swiggy’s outlook remains mixed as steady food delivery growth and improving margins are offset by slower quick commerce expansion amid intense competition. Target prices have been cut due to higher losses and lower long-term margin assumptions, though profitability is expected to improve gradually with losses peaking and breakeven targeted by Q1FY27. Valuation support exists, but re-rating hinges on clearer profit visibility.

Overseas Brokerage firm Morgan Stanley has maintained an equalweight rating on Swiggy but slashed its target price to Rs 375 from Rs 414 earlier. Target price cut is driven by higher QC losses and lower long-term margin assumptions. It continued to prefer Eternal over Swiggy.

Food delivery execution was steady with GOV growth sustaining at 18-20 per cent range, while adjusted Ebitda margin improved to 3 per cent, while medium term target of 5 per cent remains intact. Quick commerce growth moderated as Swiggy prioritized quality over scale, with CM breakeven for QC maintained for Q1FY27, but visibility on re-rating remains limited, Morgan Stanley adds.

"We acknowledge QC business is trading at cheaper valuations relative to its own history at the current prices but the re-rating would be contingent upon visibility of profits both on the contribution side and adjusted Ebitda side. The NOV growth is likely to slow down to 53 per cent/45 per cent in FY27E/FY28E contingent upon competition and addition of dark stores," said Nirmal Bang Institutional Equities.

"We are valuing the QC business 0.6 times price/GOV Dec’27 Vs earlier multiple closer to 1 times price/GOV in September 2027 given the lower probability of sharp re-rating in the sector in the middle of elevated competitive dynamics," it added with a 'buy' rating with a trimmed target price of Rs 423 apeice.

QC GOV growth was impacted by GST-related price cuts, shift of festive season, and a strategic decision to avoid participating in irrational competition. CM improved by mere 8 bps QoQ to -3.6 per cent of NOV as over 100 bps gain from ad revenue and operating leverage were largely reinvested into the 'no-fee above Rs 299' campaign, which saw limited success, said HDFC Securities.

"Management indicated that losses have now peaked, with a sequential reduction expected from hereon as it targets CM breakeven by Q1FY27. Our overall adjusted Ebitda loss estimate stands revised at Rs 1,490 crore/Rs 470 crore for FY27/28 respectively. We maintain 'buy' on the stock with an SOTP-based TP of Rs 465 per share," it adds.

Swiggy reported a moderate Q3FY26 performance, lower than expectations. Food delivery growth continues to demonstrate growth acceleration while profitability has exhibited a steady improvement. Instamart growth slowed down, hurt by elevated competition and management’s efforts to chase quality growth, said Nuvama Institutional Equities.

"We are tweaking FY26E/27E EBITDA by –3.1 per cent/-15.5 per cent due to higher-than-expected losses on the back of competitive intensity in QC," it added, maintaining a 'buy' rating with a revised SotP-based target price of Rs 490 (earlier Rs 510) as it roll forward estimates to FY28E.

Motilal Oswal Financial Services believes near-term growth in quick commerce could be lower for Instamart due to aggressive competition, but improving unit economics through higher AOVs, better store utilization, and controlled reinvestment provides visibility on gradual margin improvement.

Swiggy’s valuation offers support despite elevated competitive intensity. Steady improvements in AOV, alongside stable food delivery growth, could help narrow the valuation gap with peers over time, subject to a more rational competitive environment. We value the FD business at 35 times FY27E EV/EBITDA and QC using DCF," it added with a 'buy' tag and a target price of Rs 440.