Emkay Global has maintained its 'Buy' rating on Swiggy but reduced the target price to Rs 310 from Rs 350. The brokerage noted that while the food delivery business continues to perform well, widening losses in the quick commerce and innovation segments have impacted the outlook. Management expects quick commerce losses to peak this quarter as it targets a breakeven point at a larger scale.
Emkay Global has lowered its price target for Swiggy to Rs 310, down from Rs 350, even as it maintained a positive view on the company's long-term growth. This revision follows Swiggy’s second-quarter earnings for fiscal year 2027, which highlighted a sharp contrast between its stable food delivery business and its expanding, loss-making newer segments.
The company’s core food delivery business remains a strong pillar, generating an operating profit of Rs 3.41 billion, a 41.8% increase compared to the previous year. However, this growth has been overshadowed by higher losses in newer areas. Swiggy’s quick commerce arm, InstaMart, saw its operating losses widen to Rs 8.95 billion, up from Rs 7.78 billion in the prior quarter. Similarly, the Platform Innovation division, which includes the Toing segment, saw operating losses rise to Rs 1.62 billion from Rs 1.31 billion in the first quarter.
The brokerage has increased its loss estimates for the quick commerce and innovation segments for fiscal years 2027 and 2028, leading to the reduction in the target price. Emkay Global analysts noted that future performance will likely depend on whether Swiggy can improve order delivery efficiency and increase the amount it earns per order in these newer categories.
Swiggy management stated that losses in the InstaMart segment have reached a peak in the current quarter. The company aims to reach a breakeven point once it achieves 2.3 times its current scale. Investors are now watching to see if this scaling strategy can drive profitability without requiring deeper cash burn.
Beyond just the company’s internal performance, the quick commerce sector remains highly competitive in India, with major players vying for market share. Investors may closely track whether Swiggy can maintain its food delivery margins while managing the cost of expansion in the quick commerce and innovation verticals. The long-term success of the Toing platform also remains a key area that analysts will monitor over the coming quarters to judge its actual business potential.