Jefferies maintained its ‘Buy’ rating on Swiggy, on the back of ‘valuation comfort’. However, the brokerage slashed its price target to Rs 415 from Rs 440. The report expresses significant caution, noting the stock will likely remain range-bound until there is more clarity on industry structure and profitability.
However, the Jefferies price target implies nearly 60% upside from current levels. Meanwhile, Swiggy shares plummeted to fresh 52-week lows in intraday trade on May 13 and have declined over 8% in the last 5 days after the quarterly results for Q4FY26 were announced.
Missed earnings estimates
Swiggy’s Q4 reported revenue was below Jefferies’ estimates, while adjusted EBITDA losses were higher than expectations. For FY26, the company saw a significant Free Cash Flow (FCF) burn of Rs 3,800 crore.
Stagnant quick commerce growth
Swiggy’s quick commerce (Instamart) Gross Order Value (GOV) was essentially flat quarter-over-quarter and came below expectations. This was attributed in part to a lower take rate.
However, it added that Instamart has relevant coverage with 1,143 stores operating at 40% utilisation, and hence, new adds will be only for densification purposes. With speed increasingly commoditised, Instamart is positioning itself as a “convenience + everyday upgrades” destination.
Lack of visibility on profit in Q-commerce
Although contribution margins showed slight improvement, management refrained from providing a specific timeline for absolute EBITDA break-even in the Quick Commerce segment, citing market-structure uncertainty.
“We increase our EBITDA loss estimates – there are many unanswered questions, especially regarding the profitability path for quick commerce,” said Jefferies.
Heightened competitive intensity
The quick commerce space is facing intense competition, which is likely to keep profitability under pressure. This has forced Swiggy to maintain high marketing investments, contributing to high absolute EBITDA losses of Rs 860 crore in the q-commerce segment.
Increased loss estimates
Due to “unanswered questions” regarding the path to profitability for quick commerce, Jefferies increased its EBITDA loss estimates for the company, significantly lowering its EPS projections for FY27 and FY28.
Swiggy remains prone to high volatility due to its low margin base and the commoditisation of delivery speed in the Quick Commerce market.
Swiggy share price performance
The share price of Swiggy has fallen 9% in the last five trading sessions. The stock has declined 2.5% in the past one month and has dropped 33% in the last six months. Swiggy’s stock price has erased 17% of investors’ wealth over the last one year.
Swiggy Q4FY26 results
The company reported a net loss of Rs 800 crore for the fourth quarter of FY26. However, the loss narrowed from Rs 1,081 crore recorded in the same quarter of the last financial year.
However, its revenue from operations rose 45% year-on-year to Rs 6,383 crore in Q4 FY26.
Swiggy’s food delivery business posted a gross order value (GOV) growth of 23% YoY to Rs 9,005 crore in Q4FY26. Adjusted EBITDA for the food delivery business rose 40% to Rs 297 crore, while adjusted EBITDA margin improved to 3.3% of GOV, up 41 basis points YoY and 26 basis points quarter-on-quarter (QoQ).
Instamart posted a 68.8% YoY surge in gross order value (GOV) to Rs 7,881 crore.