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Ceding ground

Growth now slower than competition across key verticals

* Swiggy reported a 2QFY27 net revenue of INR75.7b (11.1%/36.1% QoQ/YoY) vs our estimate of INR71.5b. The food delivery (FD) business’s GOV grew 17.7% YoY, whereas the contribution margin (CM) expanded 10bp QoQ to 7.7%. FD’s adj. EBITDA as a % of GOV margin expanded 30bp QoQ to 3.4% vs. our est. of 3.3%.

* Instamart’s GOV was INR92.3b (up 31.4% YoY) vs. our estimate of INR90.5b. Instamart reported a contribution margin of -1.0% (-0.2% in 4Q). Adjusted EBITDA as a % of NOV was -13.7% (-13.2% in 1Q) vs. our estimate of -12.8%.

* Overall, Swiggy reported a net loss of INR9.2b against our est. of INR8.5b.

* For 1HFY27, its revenue grew 36.7% YoY and adj. EBITDA losses reduced from INR15b in 1HFY26 to INR14b. For 2HFY27, we expect its revenue to grow 27.6%, while the adjusted EBITDA loss is likely to increase from INR13.6b to INR14.9b. We value the FD business at 32x FY28E EV/EBITDA, 1x FY28E EV/Sales for the out-of-home, platform, and supply chain businesses, and QC using DCF. We revise our TP to INR280, implying an upside of 32%.

Our view: Lower QC growth assumptions extend the path to profitability

* Growing slower than eternal now on both FD and QC: In FD, Eternal GOV grew 21.7% YoY in 1HFY27 vs 17.5% for Swiggy. Instamart's YoY NOV growth for 1HFY27 was ~37% vs ~83% for Blinkit. In 2QFY27, orders per dark store per day were at 1,611 for Blinkit vs 1,168 for Instamart. Competitive intensity remains elevated, with management noting that the recent easing is too early to be considered sustained. Swiggy continues to focus on user retention, frequency, and differentiated assortment. In terms of dark stores, Blinkit added 508 dark stores in 1HFY27 vs 97 additions for Instamart.

* FD growth may see potential cannibalization from Toing: FY27 food delivery GOV growth guidance has been retained at 18–20% (excluding Toing), with September growth returning to above 20%. While Toing is intended to expand the addressable market through a value-led proposition, some overlap with the core platform persists, although the overlap has declined with scale. We model in ~18%/17% YoY FD GOV growth for FY27/FY28.

* QC profitability remains under pressure, with growth prioritized: Instamart is targeting double-digit QoQ NOV growth in 3Q, with contribution margin guided at 0% to -1% with only gradual QoQ improvement as losses are expected to remain stagnant. EBITDA improvement of 100bp is targeted in 3Q, with no material benefit expected from the transition to an inventory-led model, which is expected to take 2–3 quarters to complete. Store additions are expected to remain linked to capacity utilization, with ~5–7% of the network approaching capacity thresholds each quarter.

Valuation and view

* Instamart currently carries negative value in our DCF, reflecting weaker-thanexpected growth, and an extended path to profitability. We cut our FY26-30 NOV CAGR assumption from 38% to 32%, reflecting a slower growth trajectory than Blinkit as competitive intensity continues to weigh on Instamart’s performance. Lower growth is expected to delay operating leverage and extend the period of losses, resulting in downward revisions to our estimates.

* We continue to believe Swiggy's food delivery franchise and brand recall provide long-term strategic value. However, a clear path toward QC EBITDA profitability remains critical for a meaningful re-rating. We value the FD business at 32x FY28E EV/EBITDA, 1x FY28E EV/Sales for the out-of-home, platform, and supply chain businesses, and QC using DCF. We revise our TP downwards to INR280, implying an upside of 32%.

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