Swiggy Plunges Amid Q1 Loss; Analysts Weigh Growth Prioritization Against Path to Profitability

Swiggy Plunges Amid Q1 Loss; Analysts Weigh Growth Prioritization Against Path to Profitability​

Swiggy shares tumbled as much as 6% on the BSE, hitting an intraday low of Rs 280. The quick commerce and food delivery major reported a consolidated net loss of Rs 791 crore for the first quarter of FY27. This loss represents a substantial decline when compared to the Rs 1,197 crore net loss recorded in the previous year period.

Despite the stock’s drop, the company showed some signs of improving its bottom line across key operational areas. Revenue from operations surged by over 37% year-on-year (YoY) during the April–June quarter, reaching Rs 6,812 crore, up significantly from Rs 4,961 crore in the corresponding period last year.

Instamart Performance and Unit Economics​

Instamart, Swiggy’s quick commerce arm, also managed to narrow its losses during Q1 FY27. The division recorded a loss of Rs 651 crore, improving from the Rs 797 crore net loss reported in the prior year period. Instamart’s revenue from operations surged nearly 53% YoY to Rs 1,232 crore.

Gross Order Value (GOV) for Instamart saw a strong increase of nearly 40% YoY, reaching Rs 7,907 crore. The company noted that the contribution margin in Instamart stood at -0.2% of GOV, marking an improvement of 4.4 percentage points from the previous year.

Expert Ratings and Market Outlook​

Financial analysts offered varied views on Swiggy’s prospects, with sentiment generally focused on operational improvements but uncertainty around rapid profitability. Nomura maintained its 'Buy' rating but trimmed its target price to Rs 435, suggesting an approximate upside of 47%. The brokerage noted that Instamart is currently prioritizing growth over margins and remains sufficiently funded for near-term challenges.

Motilal Oswal reiterated a ‘Buy’ rating with a target price of Rs 350, implying an 18% upside. This firm highlighted the steady execution in the food delivery business and expanding margins, while noting that a clear path to quick commerce EBITDA profitability is crucial for a re-rating.

Nuvama maintained its 'Buy' rating, setting a target price of Rs 444. The brokerage pointed out that quarterly margins were impacted by seasonal cost pressures, including annual salary revisions and minimum wage hikes for dark store operations. Nuvama expects the food delivery business profitability to increasingly offset cash burn in quick commerce over coming quarters.

Challenges and Management Commentary​

Elara Capital downgraded Swiggy from Buy to Accumulate, trimming their target price to Rs 350 from Rs 360. While Elara noted that food delivery GOV grew 17.4% YoY, they cited delayed profitability as a reason for the downgrade, indicating a longer timeline needed for margin convergence with competitors.

Swiggy founder and group CEO, Sriharsha Majety, addressed the market commentary on intense competition in quick commerce. He stated that management prioritized improving unit economics over fleeting headline growth. He emphasized that their efforts to reset user base, economics, and experience have made the business much stronger and increased its staying power.