In India’s crowded online food technology space, Swiggy remains one of the most closely watched names. From food delivery to quick commerce, the company sits at the centre of a fast-changing consumption world.
After Swiggy announced its Q3FY26 numbers, the brokerage house Nuvama has maintained a ‘Buy’ recommendation and set a target price of Rs 490. From the current market price of around Rs 328, this implies an upside potential of nearly 49%.
So, what explains this optimism despite rising competition and continued losses in some parts of the business? Let’s take a look –
Nuvama on Swiggy: Q3 performance
Swiggy’s Q3FY26 came in slightly better than expectations on key operating metrics. According to the brokerage report, “Swiggy reported a moderate Q3FY26 performance with revenue at Rs 6,150 crore, slightly above our expectations.”
Earnings before interest, tax, depreciation and amortisation (EBITDA) loss reduced to Rs 780 crore, lower than what the brokerage had estimated. Profit after tax (PAT), adjusted for a Rs 10 crore impact linked to labour code provisions, stood at Rs 1,050 crore, largely in line with estimates.
As per the brokerage report, “Food delivery growth continues to demonstrate growth acceleration while profitability has exhibited a steady improvement.”
Nuvama on Swiggy: Food delivery business remains the backbone
The food delivery segment continues to be Swiggy’s most stable business. According to the brokerage report, “Food-delivery gross order value was Rs 8,960 crore.” This growth was driven by a steady expansion in the monthly transacting user (MTU) base, which rose to 1.81 crore.
Operational profitability also improved. Food delivery contribution margin expanded, helped by better advertising income and improved fleet utilisation.
Nuvama on Swiggy: Quick commerce faces tougher competition
The pressure point in the quarter came from the quick commerce business, Instamart. While headline growth remains strong, momentum has slowed due to intense competition and a conscious shift in strategy.
Gross order value (GOV) for Instamart rose sharply on a year-on-year basis but sequential growth moderated as low-value orders were trimmed.
The company has slowed dark store expansion and focused on improving average order value (AOV). While losses remain, margins showed marginal improvement. As per the report, “Adjusted EBITDA margin as a percentage of gross order value improved from minus 12.1% to minus 11.4%.”
Nuvama on Swiggy: Valuation tweak, but stance unchanged
Nuvama has trimmed its earnings estimates. According to the brokerage report, the firm has lowered its earnings estimates for FY26 and FY27 because losses were higher than expected.
The brokerage has rolled forward its valuation to FY28 estimates and retained its positive stance. As per the report, “Maintain ‘Buy’ with a revised sum-of-the-parts based target price of Rs 490.”
The brokerage values the food delivery business at 35 times adjusted EBITDA, while Instamart is valued at 0.7 times net operating value.
Conclusion
Overall, Nuvama believes Swiggy’s core food delivery business is improving steadily, even as competition weighs on quick commerce.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.