Swiggy Share Price Target at Rs 400: ICICI Securities
ICICI Securities has maintained its BUY rating on Swiggy but cut its target price to Rs 400 from Rs 520, still implying about 90% upside from the Rs 211 market price. The food and grocery delivery company's September-quarter revenue rose 36.1% year on year to Rs 7,570 crore, while the EBITDA loss widened sequentially to Rs 770 crore and the net loss reached Rs 920 crore. Instamart's gross order value jumped 31.4% to Rs 9,230 crore, and food delivery margin improved to 3.4%. The brokerage says quick commerce losses have peaked, although it now models a loss for FY28 as well.
Q2FY27 Results Update · ICICI Securities · Internet
Swiggy Order Rerouted, Not Cancelled: ICICI Securities Keeps BUY, Trims Target to Rs 400
Instamart's fastest sequential growth in three quarters came at the cost of deeper discounts. The brokerage argues quick commerce losses have now peaked, but it pushes Swiggy's profit turn further out.
BUY · Maintained
CMP Rs 211
Target Rs 400 (from Rs 520)
Upside 90%
Track your target
✓ Rating confirmed
BUY, maintained
✓ Picked up at
CMP Rs 211
↻ Route changed
Target cut from Rs 520
● Arriving
Rs 400
90% upside · DCF basis · 12 months
ICICI Securities reiterated its BUY call on Swiggy in an Oct. 23 results update, lowering its target price to Rs 400 from Rs 520. The cut reflects a 100-basis-point rise in the cost of capital and a switch to a fully diluted share count that includes unvested shares held by the employee trust. Even so, the revised target sits roughly 90% above the Rs 211 market price, a striking gap for a stock that has lost 51.1% over 12 months and trades a whisker above its 52-week low of Rs 208.
The Quarter, Checked Out Line by Line
Your cart · Q2FY27 consolidated
Revenue from operations
Up 11.1% QoQ
Rs 7,570 cr
+36.1% YoY
Adjusted revenue
5% ahead of the house estimate
Rs 7,910 cr
+33.8% YoY
EBITDA loss
Rs 650 cr in Q1; margin -10.2%
-Rs 770 cr
+418 bps YoY
Net loss
Rs 1,090 cr a year earlier
-Rs 920 cr
Wider than Q1's Rs 791 cr
Cash in the wallet, Sept. 30
Ample runway for the losses still ahead
Rs 13,660 cr
The adjusted EBITDA loss came in at Rs 759 crore, or -9.6% of adjusted revenue, slipping from -9.2% in the June quarter but better than -11.8% a year earlier. Put simply, Swiggy grew faster and spent more doing it.
Two Delivery Bags, Two Very Different Loads
Bag 1 · Food delivery
Profitable and getting richer
GOV Rs 10,050 cr · +17.7% YoY
Adj. revenue Rs 2,620 cr · +18.7%
Adj. EBITDA Rs 340 cr · 3.4% of GOV
Monthly users 1.98 crore · +15.1%
Bag 2 · Instamart (quick commerce)
Fast-growing, still bleeding
GOV Rs 9,230 cr · +31.4% YoY, +16.7% QoQ
Adj. revenue Rs 1,310 cr · +25.9%
Adj. EBITDA -Rs 900 cr · -9.7% of GOV
Monthly users 1.48 crore · +23.3%
Food delivery picked up speed into the festive season. Gross order value growth topped 20% year on year in September, and management held its FY27 guidance of 18-20% growth, excluding Toing, its standalone affordability app. Toing now runs in more than 50 cities, and two-thirds of its new users are either new to Swiggy or long dormant. ICICI Securities says a successful Toing ramp could lift combined food marketplace growth to 25-30%.
Margins are climbing toward the 5% goal. Adjusted EBITDA margin rose 32 basis points sequentially to 3.4% of GOV, helped by advertising income, cheaper deliveries and the Bolt and 99-Store formats, which together carry more than a quarter of food volumes. Management's steady-state target is 5%.
Instamart Buys Its Growth Back
Dark-store route · stores at quarter end
1,062
1,102
1,136
1,143
1,171
1,240
69 net additions in Q2 took the network to 1,240 stores in 133 cities. Orders per store per day rose 9.5% to 1,192; a new store opens once an existing one nears 2,500 daily orders.
Net order value accelerated sharply. NOV grew 13.4% quarter on quarter, against 4% and 2.5% in the two prior quarters. Swiggy added 13 lakh monthly transacting users, reactivated dormant shoppers with targeted price cuts and widened its assortment. Its Switch partnership spans about 400 brands, private label Noice appears in one in eight baskets with roughly 15 percentage points higher retention, and Nectr adds curated fruit and vegetables.
The discounts showed up in contribution. Contribution margin fell to -1% of GOV from -0.2% as reactivation spending and an adverse mix outweighed about 60 basis points of operating leverage. Instamart's adjusted EBITDA loss rose to Rs 900 crore, though as a share of GOV it eased slightly to -9.7%.
How Far Is Break-Even?
Distance to destination · annualised Instamart NOV
Management's break-even marker is Rs 60,000 crore of annualised NOV at Rs 30 contribution per order.
Management says the worst is over. It expects Instamart's adjusted EBITDA margin to improve by about 100 basis points sequentially in Q3FY27, with contribution margin guided between 0% and -1% as discounts are rolled back. The planned move to an Indian-owned-and-controlled entity, which would let Swiggy own inventory, is expected to add roughly 80 basis points to net margin. The brokerage says this could deliver sequential margin gains through the second half.
Out-of-home is quietly profitable. Its GOV grew 34.9%, active restaurants rose 48% to 66,000, and the unit has now posted seven straight quarters of positive adjusted EBITDA. Separately, Swiggy is selling Lynks Logistics to Udaan's parent for about Rs 500 crore and investing Rs 75 crore for a roughly 3.2% stake in Udaan. Exiting Lynks could lift supply-chain segment EBITDA by about Rs 20 crore a quarter from Q3FY27.
Estimates: Break-Even Slips Past FY28
| Rs crore | FY25A | FY26A | FY27E | FY28E |
|---|---|---|---|---|
| Net revenue | 15,227 | 23,053 | 30,222 | 38,679 |
| EBITDA | -2,786 | -3,231 | -2,253 | 301 |
| EBITDA margin (%) | -18.3 | -14.0 | -7.5 | 0.8 |
| Net loss | -3,105 | -4,144 | -2,799 | -573 |
| EPS (Rs) | -13.9 | -16.9 | -10.7 | -2.2 |
| FY28E net profit, before vs after cut | Old +Rs 499 cr → new -Rs 488 cr (revision table); EBITDA cut 78.1% to Rs 301 cr | |||
The revisions are steep. ICICI Securities trimmed revenue estimates by 2.8% for FY27 and 4% for FY28, but the bigger change is below the top line. The FY27 EBITDA loss estimate roughly doubles to Rs 2,253 crore from Rs 1,097 crore, and FY28, previously expected to deliver a small profit, now shows a net loss.
What Investors Should Weigh
Valuation coupon
TP400
Method ...... 3-stage DCF
WACC ........ +100 bps
Shares ...... fully diluted
Old TP ...... Rs 520
Upside ...... ~90%
A value case, not a momentum one. At Rs 211, Swiggy carries a market value of about Rs 58,400 crore, and it has trailed the Sensex by 37.8 percentage points over a year. ICICI Securities' 12-month target of Rs 400 rests on a three-stage discounted cash flow model rather than an earnings multiple, since the company is loss-making through the forecast period.
Domestic funds are buying the dip. Mutual fund and other institutional holdings climbed to 29% in September from 20.2% in March, while foreign investors cut their stake to 8.9% from 14.6%. Swiggy has no promoter holding.
What to watch: Q3FY27 delivery on the promised 100-basis-point Instamart margin improvement, and whether food delivery growth stays above 20% after the festive season.
Editor's Note
1. Two FY28 profit figures. The earnings-revision table puts the new FY28 net loss at Rs 488 crore, while the financial summary and profit-and-loss statement show Rs 573 crore. We use Rs 573 crore in the estimates table and cite Rs 488 crore only for the revision comparison.
2. Margin change signs. The revision table prints the EBITDA margin changes as +393 and +264 basis points, although both are downgrades (FY27E to -7% from -4%; FY28E to 1% from 3%).
3. Valuation ratios look stale. The printed FY27E price-to-sales of 2.4x and FY28E EV/EBITDA of 221.6x imply a market value near Rs 72,000-74,000 crore, well above the Rs 58,400 crore stated at Rs 211. They appear to have been calculated at an earlier, higher share price, so we have not quoted them.
4. Small rounding gaps. Management commentary cites a 32-basis-point food delivery margin gain and an 82-basis-point Instamart contribution decline; the results table shows 30 and 80 basis points.
Sources
ICICI Securities Institutional Equity Research, Swiggy Q2FY27 Results Update, Oct. 23, 2026; analysts Abhisek Banerjee, Manoj Menon, Jayram Shetty and Nirant Dhumal. Company data and management commentary as cited in the report. Figures converted from Rs million and billion to crore by TopNews; the break-even bar and store route are drawn from the report's printed figures.
Disclaimer: This TopNews Story is based on a brokerage research report and is for information only. It is not investment advice. Stock market investments are subject to market risks; consult a registered financial adviser before making investment decisions.
