Swiggy shares slips 7% as Q3 loss widens; brokerages trim target price

Swiggy shares slipped 7.4 per cent in trade on BSE, logging an intra-day low at ₹1,075.3 per share. At 9:47 AM, Swiggy share price was trading 2.78 per cent higher at ₹1,049.1 per share. In comparison, BSE Sensex was down 0.58 per cent at 82,424.42.

 

The selling pressure on the counter came after the company reported mixed December quarter (Q3FY26) results on Thursday, after market hours.

Swiggy Q3 results recap:

In Q3, delivery platform Swiggy’s consolidated net loss widened to ₹1,065 crore in the December quarter (Q3 FY26), compared with a loss of ₹799 crore a year earlier.

 

However, it reported consolidated revenue from operations of ₹6,148 crore, up 54 per cent from ₹3,993 crore a year earlier.

Brokerages’ views on Swiggy

Nomura | Buy | Target cut to ₹546 from 560

Nomura has lowered the target, factoring in a lower gross order value (GOV) growth rate in the quick commerce (QC) business. At the current levels, according to analysts, the market does not appear to be ascribing any value to the QC business. Nomura believes Swiggy needs to improve its execution toward profitability in the QC business for the stock to do well from here. 

 

A key risk is continued intense competition in QC delaying contribution margin breakeven beyond FY27F.  ALSO READ | ITC posts flat Q3 profit; brokerages cautious on cigarette tax, margin woes

Nirmal Bang | Buy | Target cut to ₹423 from ₹455

Nirmal Bang maintained a cautious stance on Swiggy, acknowledging that while the quick commerce (QC) business's adjusted Earnings before interest, tax, depreciation and amortisation (Ebita) losses are stabilising (₹908 crore in Q3 vs ₹890 crore in Q1), this comes at the cost of moderating growth momentum. 

 

The brokerage believes the "No fee above ₹299" initiative was a temporary user acquisition experiment likely to be rolled back, as it added ₹100 crore in incremental losses without driving durable retention. Despite this, Swiggy delivered over 100 basis points (bps) of organic contribution margin improvement through ad growth and operational leverage, positioning the QC business toward contribution breakeven by Q1FY27. 

 

In contrast, the food delivery segment showed stronger fundamentals with contribution margin expanding to 7.6 per cent and adjusted Ebitda margin reaching 3 per cent of gross order value (GOV), supported by ad monetisation and improved unit economics. Nirmal Bang values the QC business at 0.6x Price/GOV (Dec'27) versus its historical 1x multiple, reflecting lower re-rating probability amid intense competition. 

 

Management's commitment to prioritising sustainable unit economics over discount-led growth and maintaining contribution breakeven targets signals a strategic shift toward building a profitable, high-quality business rather than chasing vanity metrics.  ALSO READ | Muted Q3 show leads analysts to retain 'Sell' on Colgate-Palmolive India

Motilal Oswal Financial Services | Buy | Target cut to ₹440 from ₹530

Analysts believe near-term growth in QC could be lower for Instamart due to aggressive competition, but improving unit economics through higher average order value (AOVs), better store utilisation, and controlled reinvestment provides visibility on gradual margin improvement.

 

At this level, Swiggy’s valuation offers support despite elevated competitive intensity. Steady improvements in AOV, dark store throughput, alongside stable food delivery growth, could help narrow the valuation gap with peers over time, subject to a more rational competitive environment, analysts said in the note.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.