In its latest note, Nuvama noted that Swiggy is “one of the largest hyperlocal delivery companies in India,” and has shown a turnaround in execution following a few strategic missteps.
“Its Food Delivery is now outgrowing Zomato’s, thereby spurring market share stability and margin pickup,” the brokerage stated, adding that while Q-com is also “moving in the right direction,” it still faces some “execution delays.”
Nuvama’s SOTP valuation assigns the bulk of the value to the Food Delivery business, citing its superior scale and profitability profile.
For Quick Commerce, the firm assumes a lower valuation due to an execution gap and differences in scale and profitability, especially when compared to rival Blinkit.
The brokerage values the Food Delivery arm at Rs 300/share, based on 40x Sep-27E EBITDA, representing a ~33% implied discount to Zomato. The Q-com vertical is valued at Rs 144/share, based on 0.8x Sep-27E NOV, which is a 50% implied discount to Blinkit.
Food delivery: A turnaround in motion
According to Nuvama, Swiggy has emerged from a phase of missed opportunities, particularly between FY19 and FY24, when it ceded leadership in food delivery and lost ground in Q-com despite being an early mover.However, “the tide now appears to be turning” as the company’s Food Delivery vertical has outpaced Zomato’s for four consecutive quarters, aided by improving profitability.
The brokerage notes that Swiggy’s Quick Food Delivery (QFD) strategy is gaining traction, helping the company scale up to 700-plus cities and 10–12% of GOV, in contrast to Zomato’s scale-back of QFD for restaurant partners. EBITDA margins have improved significantly, with adjusted EBITDA margin moving from –0.2% in FY24 to 2% of GOV in FY25, with further expansion expected to 6% of GOV in FY26 and 9% in FY27.
Swiggy’s adjusted EBITDA is projected to deliver a ~54% CAGR over FY25–28E, Nuvama said.
Q-com: Still maturing, but showing promise
While Swiggy’s Q-com business has trailed competitors due to non-retail DNA and past execution challenges, Nuvama believes recent leadership changes and strategic investments are bringing better structure.
Post-IPO, GOV growth accelerated to over 100%, supported by deeper investments in dark store capacity and customer acquisition.
Instamart, Swiggy’s Q-com arm, reported losses of INR 8–9 billion due to warehousing and customer acquisition costs. However, Nuvama expects improvement, noting that “Instamart reported a meaningful improvement in AOV in H1FY26, and we forecast losses shall narrow as store utilisation scales up.”
The firm added that Swiggy is among the Top-3 Q-com platforms in India with over 1,102 dark stores, and remains committed to narrowing the gap with Blinkit and Zepto in terms of GOV and unit economics.
