Brokerage firm Motilal Oswal has started tracking Swiggy with a positive rating and a target price of INR 280. The outlook is supported by robust revenue growth in both food delivery and Instamart, though the company continues to report overall net losses. Investors are monitoring whether the quick-commerce segment can achieve profitability while maintaining its rapid scale.
Brokerage firm Motilal Oswal has initiated coverage on Swiggy, setting a target price of INR 280 per share. The move follows the company’s recent financial results, which showed a mix of strong revenue growth and ongoing operational expenses in its newer business segments.
Financial Performance and Growth Drivers
Swiggy reported revenue of INR 75.7 billion for the second quarter of the 2027 fiscal year. This marks a 36.1% increase compared to the same period last year and an 11.1% rise from the previous quarter. The company’s food delivery segment continues to be the primary engine of this growth, with the gross order value increasing by 17.7% over the last year. The profit made on each order in this segment also saw a slight improvement, rising 10 basis points to 7.7%.
While the food delivery business shows signs of stability, the company's quick-commerce arm, Instamart, remains in a high-growth but capital-intensive phase. Instamart recorded a gross order value of INR 92.3 billion, representing a 31.4% year-on-year increase. Despite this rapid expansion in reach and sales, the segment is still working toward turning profitable. It reported a contribution margin of -1.0%, an improvement from earlier figures but still below break-even.
Investment Context and Operational Challenges
The brokerage used a sum-of-the-parts valuation model to arrive at its target price. This approach values different parts of the business—food delivery, quick commerce, and other services—using different financial metrics. For the food delivery business, the analysts applied a multiple of 32 times the estimated earnings for the 2028 fiscal year. The quick-commerce business was valued using a method that accounts for future cash flow, reflecting the market's focus on its potential scale rather than current immediate profits.
Despite the optimistic target, the company reported a net loss of INR 9.2 billion for the quarter. A significant portion of this loss is tied to the costs associated with scaling Instamart and other operational expenses. The adjusted earnings before interest, tax, depreciation, and amortization for the quick-commerce business were -13.7% relative to the net order value, a figure that was slightly weaker than some market expectations.
What Investors Should Monitor
The key factor for shareholders will be the company’s ability to balance rapid growth with the need to reduce losses. While revenue is rising, the profitability of the quick-commerce segment remains the most important metric to watch in the coming quarters. Investors will likely look for signs that Instamart can move toward positive margins as it matures, especially in a competitive sector where operational costs can be high. The company's future performance will depend on its ability to maintain growth in food delivery while simultaneously managing the cash burn in the quick-commerce segment.