Foodtech major Swiggy’s shares plunged as much as 17.23% to a 52-week low of ₹174.90 on the BSE today, a day after its Q2 FY27 results showed widening losses at quick commerce arm Instamart.
The stock pared some losses to trade at ₹181.50, down 14.10%, at 11:21 IST. Its market capitalisation stood at ₹50,099.69 Cr (about $5.2 Bn) at that time.
Several brokerages lowered their price targets following the results, citing higher-than-expected quick commerce losses and concerns over Instamart’s growth and execution. However, most retained their existing ratings.
Swiggy’s consolidated net loss narrowed 16% YoY to ₹922 Cr in Q2 FY27 but widened 17% from ₹791 Cr in the preceding quarter. Operating revenue rose 36% YoY to ₹7,571 Cr.
Instamart’s adjusted EBITDA loss increased to ₹895 Cr from ₹849 Cr a year earlier and ₹778 Cr in Q1 FY27, offsetting an improvement in food delivery profitability.
Brokerages Lower Price Targets
Citi retained its ‘Buy’ rating but cut its target price to ₹330. It highlighted 18% YoY growth in food delivery gross order value (GOV), alongside margin improvements of 60 basis points YoY and 30 basis points QoQ. However, Instamart’s net order value (NOV) grew around 13% sequentially, below its estimate of 16%, while losses exceeded expectations.
CLSA retained its ‘Outperform’ rating but lowered its target price to ₹262. It said Instamart’s 13.4% sequential NOV growth fell short of expectations, while losses were higher than anticipated. The brokerage flagged a widening gap between Swiggy and Eternal in growth and profitability, adding that Instamart needs to deliver consistent improvements to rebuild investor confidence.
Nomura retained its ‘Buy’ rating but cut its target price to ₹300. It expects Swiggy’s food delivery business to generate ₹1,300 Cr to ₹1,900 Cr in EBITDA across FY27 and FY28. However, it said quick commerce execution continued to disappoint. The brokerage values food delivery at 40 times its estimated FY28 EBITDA and assigns no value to quick commerce or Swiggy’s cash balances.
Jefferies retained its ‘Buy’ rating but lowered its target price to ₹330. While food delivery revenue and EBITDA met expectations, it said reducing quick commerce losses remains critical.
UBS maintained its ‘Buy’ rating and ₹375 target price despite describing the results as weaker than expected. Food delivery performed in line with estimates, but quick commerce losses exceeded expectations. It nevertheless noted early signs of a recovery in growth.
HSBC maintained its ‘Hold’ rating but cut its target price to ₹240 from ₹315. It said improvements in Instamart’s operating metrics were insufficient to build confidence in Swiggy’s long-term plans, while flagging food delivery market share losses and intensifying competition.
Macquarie maintained its ‘Underperform’ rating with a target price of ₹230, citing negative cash flow and intense competition. It said continued spending on pricing and network expansion, alongside monetisation pressures, could delay profitability.
Bank of America retained its ‘Neutral’ rating but cut its target price to ₹245 from ₹275. It noted that Swiggy’s food delivery GOV grew 18% YoY, compared with Zomato’s 21.5%. The brokerage also flagged potential cannibalisation of Swiggy’s main food delivery business by its affordable-meals offering Toing, adding that Blinkit’s performance was increasing pressure on Instamart to demonstrate a path to profitability.
Instamart’s Profitability Roadmap
Instamart reported operating revenue of ₹1,306 Cr in Q2 FY27, up 33% YoY and 6% QoQ. Its segment loss widened to ₹764 Cr from ₹739 Cr a year earlier and ₹651 Cr in the preceding quarter.
Despite the increase in absolute adjusted EBITDA losses, its adjusted EBITDA margin improved marginally to -9.7% of GOV from -9.8% in Q1 FY27.
Swiggy said it believes Instamart’s adjusted EBITDA losses peaked in Q2 FY27. It expects double-digit sequential NOV growth in Q3 FY27, alongside an improvement of around 100 basis points in adjusted EBITDA margin.
Instamart added 1.3 Mn average monthly transacting users during the quarter, taking the total to 14.8 Mn. Orders rose 29% YoY to 130.3 Mn, while net average order value increased 4% to ₹506.
The platform added 69 dark stores, expanding its network to 1,240 stores across 133 cities.
Swiggy also plans to begin shifting Instamart to an inventory-led model by mid-Q3 FY27, with the transition expected to take two to three quarters. Under this model, the business will own the inventory it sells.
Swiggy expects the transition to improve Instamart’s contribution margin by around 80 basis points and shorten its working capital cycle by eight to 10 days.
Meanwhile, food delivery operating revenue rose 22% YoY to ₹2,338 Cr, while segment profit increased 39% to ₹349 Cr.
“Our food delivery business delivered its highest ever profits and margins while we continue to unlock new category growth through Toing, our standalone offering for affordable meals,” Swiggy cofounder, MD and group CEO Sriharsha Majety said.
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