Target: ₹550
Current Market Price (CMP): ₹434.80
In a recent update, analysts have upgraded Swiggy to a Buy rating, citing a shift in the trajectory of its food delivery (FD) business alongside enhanced unit economics in its quick commerce (QC) segment. This report outlines the changing dynamics surrounding Swiggy.
The company has demonstrated notable improvements in execution, with a rise in average order value (AOV) within the QC sector positively impacting growth prospects. The competitive landscape is easing, coupled with a halt in the expansion of dark stores, creating a more favorable environment for achieving breakeven performance. Swiggy’s approach focuses on optimizing current infrastructure while selectively adding new dark stores to enhance its coverage, positioning itself for consistent growth and increased contribution margin in upcoming quarters.
Recent additions to Swiggy’s offerings, such as Snacc and the ’99 Store,’ are designed to capture new consumption moments and expand the monthly active user (MTU) base as well as frequency of orders.
The analysts contend that Swiggy’s shift from an aggressive expansion strategy to a more fiscally prudent business model is likely to yield steady margin improvement. The combination of stable growth in the FD segment, increasing AOV in Instamart, and reduced fixed-cost burdens promises clearer visibility of positive unit economics moving forward. The firm values the FD business at 35 times FY27E adjusted EBITDA, while employing discounted cash flow (DCF) methods for the QC segment, ultimately arriving at a target price of ₹550. This suggests a potential upside of 26 percent.
Published on October 13, 2025
