ICICI Securities has lowered its price target for Swiggy to ₹400 from ₹520, citing a higher cost of capital and changes in share calculations. Despite the downward revision, the brokerage maintains a 'Buy' rating, highlighting steady growth in quick commerce and food delivery. Investors should watch for the impact of upcoming cost-control measures on the company's profit margins.
ICICI Securities has revised its outlook on Swiggy, lowering the price target to ₹400 from ₹520 while maintaining a 'Buy' rating. The brokerage attributed this adjustment to a shift in technical valuation metrics rather than a change in the company's business prospects. Specifically, the firm increased its estimate for the cost of capital by 100 basis points and updated its share count model to include unvested shares currently held in the employee trust. These adjustments effectively change how the company's value is calculated on a per-share basis.
Despite the lowered target, the report points to continued operational growth. Swiggy’s quick commerce division, Instamart, remains a core focus, with the company adding 69 new stores during the second quarter of the 2027 fiscal year. This expansion strategy focuses on dense urban areas to improve delivery efficiency. The quick commerce segment saw its net order value grow by 13.4% sequentially. This was supported by the addition of 1.3 million monthly transacting users, a figure boosted by targeted pricing and efforts to reactivate inactive accounts.
The food delivery business also showed steady performance, recording a 30-basis-point expansion in margins on a sequential basis. Analysts expect this momentum to continue, with the firm anticipating further improvements in the second half of the fiscal year. Swiggy is also planning to implement tighter operating cost controls starting in the third quarter. These measures, combined with a strategy to reduce promotional discounting, are projected to help the quick commerce division improve its EBITDA margins throughout the remainder of the year.
For investors, the key factor remains the company's ability to balance rapid growth in the quick commerce sector with sustainable profitability. The quick commerce market in India is highly competitive, and heavy capital spending is often required to maintain infrastructure and market share. The effectiveness of the planned cost-control measures will be the primary monitorable for shareholders in the coming quarters. Investors may track whether these operational changes successfully improve profitability while maintaining the current pace of customer acquisition and order growth in the food and quick commerce segments.