Swiggy shares: Higher growth than Eternal in food delivery; worth a buy?
Swiggy’s quick commerce average order value (AOV) rose 26 per cent YoY to Rs 612 per order from Rs 487 in Q1FY25, driving a 96 basis points (bps) sequential improvement in contribution margin.
- Aug 1, 2025,
- Updated Aug 1, 2025 9:10 AM IST
Swiggy Ltd continued to deliver higher growth in Food Delivery (FD) business than Eternal Ltd (Zomato). Its quick commerce (QC) business demonstrated improving operating trend, with key KPIs trending positively in the June quarter, said stock analysts as they maintained neutral-to-positive stance on the online food delivery platform.
The targets on the counter stands at Rs 450-500 apiece against the stock's Thursday closing price of Rs 403.95 per share, hinting at a decent upside ahead.
Nirmal Bang Institutional Equities said Swiggy’s quick commerce average order value (AOV) rose 26 per cent YoY to Rs 612 per order from Rs 487 in Q1FY25, driving a 96 basis points (bps) sequential improvement in contribution margin to -4.6 per cent of gross order value (GOV). despite the launch of Maxxsaver, higher seasonal delivery costs and competitive intensity.
"While absolute losses increased by Rs 56 crore QoQ, the business added Rs 985 crore in incremental GOV and Rs 643.70 crore in net order value (NOV), resulting in lower losses as a percentage of GOV. Adjusted Ebitda margin improved 216bps QoQ to -15.8 per cent, highlighting better monetization and cost absorption," Nirmal Bang said.
With the core dark store network built out and over 28 per cent of MTUs adopting Maxxsaver, the domestic brokerage believes Swiggy remains on the path to contribution breakeven, with quarterly improvement and targeted breakeven between Q3FY26 and Q1FY27.
Nuvama said Swiggy's Q1 food delivery profitability was impacted, but the management remains confident of improving it during the year. In QC, GOV grew 21 per cent QoQ while losses increased to Rs 890 crore due to wage hike, leadership hiring and investment in marketing.
"Unlike Eternal, Swiggy’s management continues to see elevated competitive intensity in QC as both incumbents and new players vie for customers," it noted.
MOFSL now values Food delivery (FD) business on EV/Ebitda (FY27e) multiple vs DCF earlier; and ascribe Swiggy’s FD business a 10 per cent discount to Eternal. It acknowledged that Swiggy is growing faster, and once parity on Ebitda margin is achieved, this discount may not be warranted.
"We arrive at our revised price of Rs 450. We believe execution has improved notably, with the improvement in QC AOV being an encouraging sign. We remain on the sidelines due to continued heightened competition in the sector. Our target of Rs 450 implies an 11 epr cent upside from the current price. We reiterate our NEUTRAL rating on the stock," it said.
Nirmal Bang values the stock at Rs 500. Nuvama did not rate Swiggy.
Swiggy Ltd continued to deliver higher growth in Food Delivery (FD) business than Eternal Ltd (Zomato). Its quick commerce (QC) business demonstrated improving operating trend, with key KPIs trending positively in the June quarter, said stock analysts as they maintained neutral-to-positive stance on the online food delivery platform.
The targets on the counter stands at Rs 450-500 apiece against the stock's Thursday closing price of Rs 403.95 per share, hinting at a decent upside ahead.
Nirmal Bang Institutional Equities said Swiggy’s quick commerce average order value (AOV) rose 26 per cent YoY to Rs 612 per order from Rs 487 in Q1FY25, driving a 96 basis points (bps) sequential improvement in contribution margin to -4.6 per cent of gross order value (GOV). despite the launch of Maxxsaver, higher seasonal delivery costs and competitive intensity.
"While absolute losses increased by Rs 56 crore QoQ, the business added Rs 985 crore in incremental GOV and Rs 643.70 crore in net order value (NOV), resulting in lower losses as a percentage of GOV. Adjusted Ebitda margin improved 216bps QoQ to -15.8 per cent, highlighting better monetization and cost absorption," Nirmal Bang said.
With the core dark store network built out and over 28 per cent of MTUs adopting Maxxsaver, the domestic brokerage believes Swiggy remains on the path to contribution breakeven, with quarterly improvement and targeted breakeven between Q3FY26 and Q1FY27.
Nuvama said Swiggy's Q1 food delivery profitability was impacted, but the management remains confident of improving it during the year. In QC, GOV grew 21 per cent QoQ while losses increased to Rs 890 crore due to wage hike, leadership hiring and investment in marketing.
"Unlike Eternal, Swiggy’s management continues to see elevated competitive intensity in QC as both incumbents and new players vie for customers," it noted.
MOFSL now values Food delivery (FD) business on EV/Ebitda (FY27e) multiple vs DCF earlier; and ascribe Swiggy’s FD business a 10 per cent discount to Eternal. It acknowledged that Swiggy is growing faster, and once parity on Ebitda margin is achieved, this discount may not be warranted.
"We arrive at our revised price of Rs 450. We believe execution has improved notably, with the improvement in QC AOV being an encouraging sign. We remain on the sidelines due to continued heightened competition in the sector. Our target of Rs 450 implies an 11 epr cent upside from the current price. We reiterate our NEUTRAL rating on the stock," it said.
Nirmal Bang values the stock at Rs 500. Nuvama did not rate Swiggy.