Swiggy shares hit 15% lower circuit post-Q2 results; brokerages cut target prices over profitability concerns
Brokerages have cut Swiggy's target price expressing concerns about the company's quick commerce execution, profitability and competitive position.
Shares of Swiggy fell as much as 15 percent today, October 23, to hit the lower circuit of Rs 179.65, after Instamart operator reported wider losses in its quick-commerce business during the September quarter of the financial year 2026-27, keeping the focus on profitability in the competitive segment following rival Eternal's quarterly results this week. Meanwhile, several brokerages cut the stock’s target prices, expressing concerns about the firm’s quick commerce execution, profitability and competitive position.
Swiggy share price fall 15% Swiggy shares opened at Rs 204.90 and went on to crash 15 percent to hit lower circuit level Rs 179.65, on the BSE. Swiggy Q2FY27 results details Swiggy's consolidated net loss narrowed to Rs 922 crore for the July-September quarter of FY27, compared with a loss of Rs 1,092 crore during the July-September quarter of 2025-26. However, on a sequential basis, the net loss widened to Rs 922 crore from Rs 792 crore in the preceding June quarter.
Revenue from operations rose 36 percent YoY to Rs 7,571 crore in the second quarter of FY27, from Rs 5,561 crore in the same period last financial year, according to an exchange filing. Swiggy's total expenses also rose to Rs 8,703 crore, up from Rs 6,711 crore a year ago. The consolidated adjusted EBITDA loss widened to Rs 760 crore from Rs 695 crore posted in the year-ago period. Swiggy Food Delivery gross order value (GOV) grew 17.7 per cent YoY to Rs 10,054 crore, the filing stated.
"Our food delivery business delivered its highest-ever profits and margins while we continue to unlock new category growth through Toing, our standalone offering for affordable meals,” said Sriharsha Majety, MD & Group CEO, Swiggy. “In quick commerce, we delivered accelerated growth as guided and obtained necessary approvals to qualify as an Indian owned and controlled company - an important milestone for the business with the transition underway," added Majety.
Swiggy said the Quick Commerce net order value (NOV) grew 31.4 per cent YoY and 13.4 per cent QoQ to Rs 6,954 crore. Its quick commerce platform Instamart added 69 dark stores in the quarter, equal to the cumulative additions of the last three quarters, bringing the total to 1,240 stores, the company said. Swiggy share price target: What brokerages say Even as Swiggy reported steady metrics in the core food delivery segment, brokerages are cautious over the company’s quick commerce profitability, competition and the firm’s ability to deliver sustained growth.
The brokerages have lowered their target prices following the September-quarter earnings performance. Brokerage firm HSBC maintained a ‘Hold’ rating on Swiggy. However, it cut the stock’s target price to Rs 240 per share from Rs 315. The brokerage acknowledged improvements in operating metrics and Instamart's growth in the second quarter results but said confidence in the company's long-term guidance remained weak.
It also flagged food delivery market share losses, intensifying competition and Instamart's relatively smaller scale as hurdles to achieving EBITDA breakeven. CLSA retained its ‘Outperform’ call but reduced its target price to Rs 262. The brokerage noted that Instamart's NOV growth accelerated to 13.4 percent on quarter-on-quarter basis but missed expectations, while losses widened. The brokerage further stated food delivery adjusted EBITDA met estimates but missed consensus expectations.
CLSA noted that the performance gap between Swiggy and Eternal widened in growth and profitability across both businesses, adding that sustained operational improvements will be needed to rebuild investor confidence in the coming quarters. Nomura maintained a ‘Buy’ rating on Swiggy but cut its target price to Rs 300 per share. The brokerage noted that the food delivery business has remained steady and is expected to generate EBITDA of Rs 1,300-1,900 crore in FY27-28, but said execution in quick commerce continues to disappoint.
Nomura values Swiggy's food delivery segment at 40 times FY28 EBITDA, in line with Eternal, while assigning no value to its quick commerce business or its cash balance amid execution uncertainty. However, the brokerage believes the risk-reward remains favourable, as concerns over quick commerce are reflected in the share price. Brokerage Jefferies retained its ‘Buy’ call for Swiggy but lowered its target price to Rs 330 per share.
The brokerage said the food delivery revenue and EBITDA were in line with expectations, but quick commerce NOV growth slowed year-on-year despite quarter-on-quarter growth. It also flagged a widening of Instamart's adjusted EBITDA losses to around Rs 900 crore, the highest level in three quarters. According to Jefferies, reducing quick commerce losses is the key to unlocking value, although the stock price does not fully reflect food delivery business value and cash holdings.
