Swiggy share price target cut by Motilal Oswal on longer path to profitability after Q2 results

Shares of food delivery and quick-commerce aggregator Swiggy Ltd. will be reacting to its September quarter results on Friday, October 23. The numbers were reported after market hours on Thursday, where the company reported yet another net loss.

Brokerage firm Motilal Oswal has cut its price target on Swiggy to ₹280 from ₹360 earlier, although it still maintained its "buy" recommendation on the stock. The revised price target implies an upside potential of 32% from Thursday's closing price, which is close to record low levels for the stock.

Motilal Oswal's revised price target is also below Swiggy's IPO price of ₹390.

Swiggy is now growing slower than Eternal on both the Food Delivery and the Quick Commerce front, according to the firm. For the first half of this financial year, Eternal's Gross Order Value (GOV) in the Food Delivery business grew 21.7%, while for Swiggy, that figure stood at 17.5%.

Even for Instamart, the Net Order Value growth year-on-year during the first half of this financial year was just 37%, compared to Blinkit's 83%. Orders per dark store per day stood at 1,611 for Blinkit in the September quarter, compared to only 1,168 for Instamart.

Instamart added only 97 stores during the quarter, compared to 508 that Blinkit added.

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 Motilal Oswal's Discounted Cash Flow analysis, Swiggy's Instamart currently carries negative value, reflecting weaker-than-expected growth, and an extended path towards the company's profitability.

The brokerage has cut Swiggy's financial year 2026-2030 Net Order Value CAGR assumption to 32% from 38% earlier, to factor in a slower growth trajectory than Blinkit, as competitive intensity continues to impact Instamart's performance. "Lower growth is expected to delay operating leverage and extend the period of losses, resulting in downward revision to our estimates," Motilal Oswal's note said.

However, the brokerage added that despite the concerns, it continues to believe in Swiggy's food delivery franchise and brand recall providing long-term strategic value for shareholders, but only a clear path towards EBITDA profitability for Quick Commerce will be critical for any meaningful re-rating.

30 analysts currently have coverage on Swiggy, of which 23 have a "buy" rating, four say "hold", and three have a "sell" rating.

Shares of Swiggy ended 5.5% lower on Thursday ahead of the results announcement at ₹211.4. The stock is down 46% so far this year, compared to Eternal, whose share price has gained 7% so far year-to-date.

This story will be updated with more recommendations.