Shares of Indian foodtech giant Swiggy plunged over 17% to a 52-week low after the company reported widening losses at its Instamart quick commerce arm in Q2 FY27, prompting brokerages to cut price targets amid concerns over growth and profitability.
- Swiggy’s Q2 losses widen due to Instamart’s quick commerce segment
- Brokerages cut price targets but mostly retain buy or outperform ratings
- Instamart’s adjusted EBITDA losses peaked, with signs of margin improvement expected
What happened
Swiggy’s shares plunged as much as 17.23% to ₹174.90 on the BSE following the release of its Q2 FY27 results, marking a 52-week low. The company reported a consolidated net loss of ₹922 crore, which narrowed 16% year-on-year but widened 17% from the previous quarter. The sharp share decline was driven primarily by mounting losses at Instamart, Swiggy’s quick commerce arm, whose adjusted EBITDA loss increased to ₹895 crore, surpassing previous quarters and broker expectations.
Operating revenue rose 36% year-on-year to ₹7,571 crore, fueled largely by growth in the food delivery segment. However, Instamart’s net order value grew at just 13% sequentially, below analyst estimates, which intensified concerns over its growth trajectory and profitability. Instamart added 1.3 million average monthly transacting users in the quarter, reaching 14.8 million in total. Orders were up 29% year-on-year, but losses continue to weigh on the overall financial performance.
Why it matters
Swiggy is a key player in India's rapidly evolving foodtech market, with a growing quick commerce segment that investors have closely watched for signs of sustainable profitability. The widened losses at Instamart and the resulting stock drop highlight challenges in balancing aggressive growth with financial discipline in quick commerce, a space experiencing intense competition from rivals like Blinkit.
Brokerages reacted by lowering price targets significantly, reflecting heightened caution about Swiggy's near-term outlook. Citi, CLSA, Nomura, Jefferies, UBS, HSBC, Macquarie, and Bank of America all cut their target prices despite generally maintaining buy or neutral ratings. Concerns include escalating losses, slower order growth in Instamart, and potential margin pressures from pricing competition, particularly as Swiggy also navigates challenges in its core food delivery business against peers such as Zomato.
What to watch next
Swiggy has indicated that Instamart’s adjusted EBITDA losses peaked in Q2 FY27 and projects double-digit sequential growth in net order value along with a roughly 100 basis point margin improvement in Q3 FY27. Monitoring whether Instamart can effectively reduce losses while scaling growth will be critical for restoring investor confidence and stabilizing the stock.
Investors and analysts will also watch for developments in Swiggy’s core food delivery business, including market share trends and profitability improvements amid intensifying competition. Additionally, the company’s strategy around its affordable meals offering and quick commerce execution could influence its path to sustained profitability and valuation recovery.