Swiggy share price slumps over 4% after Q1 net loss widens. Should you buy or sell?
The quick commerce and food delivery giant Swiggy posted a wider consolidated net loss of ₹ 1,197 crore for the first quarter of FY26, significantly higher than ₹ 611 crore posted in the corresponding period last year.
However, the company's consolidated revenue in Q1FY26 54% surged to ₹ 4,961 crore from ₹ 3,222 crore, year-on-year (YoY)
The consolidated adjusted EBITDA loss during the June quarter increased to ₹ 813 crore from ₹ 465 crore a year ago, and ₹ 732 crore in the preceding March quarter.
Swiggy said that its platform Gross Order Value (B2C GOV) rose ~45% YoY to ₹ 14,797 crore, even as its B2C adjusted EBITDA margin saw a 204 bps decline YoY to -4.7%. The figure improved 12 bps QoQ. Overall, average monthly transacting users (MTU) on the Swiggy platform grew 35.2% YoY and 9% QoQ to 21.6 million.
The food delivery business saw an 18.8% YoY growth in GOV to ₹ 8,086 crore, while its adjusted EBITDA margin contracted to 2.4% of GOV.
Its quick commerce business, Instamart, reported GOV growth of 108% YoY and 21% QoQ, and its average order value (AOV) grew 25.6% YoY to ₹ 612 ahead of its guidance. The contribution margins improved by ~100 bps QoQ to -4.6%, while the adjusted EBITDA margin improved to -15.8%
Brokerages have maintained a bullish view on Swiggy shares led by the company's improved execution, faster growth and improvement in the quick commerce segment.
ICICI Securities said that the Swiggy Q1 results were broadly in line in both food delivery and quick-commerce in terms of GOV growth and profitability. However, 16% QoQ increase in AOV was a key positive surprise.
'We think this drastically improves the profit outlook for Instamart at the unit economics level and should more than compensate for the relatively subdued order growth. Also, the clarity on slower store expansion, as Instamart dials up store efficiency, bodes well for profit improvement in the near term and gives us confidence that Instamart should achieve their contribution breakeven guidance. Food delivery GOV growth at 18.8% YoY indicates sustained market share gain in the category,' ICICI Securities said.
According to the brokerage firm, Swiggy shares can rerate meaningfully in the next 6–9 months as cash burn reduces, while Rapido stake sale could boost the balance sheet.
ICICI Securities maintained a 'Buy' rating on Swiggy shares with a target price of ₹ 740 apiece, implying an upside potential of over 83% from Thursday's closing price.
Motilal Oswal Financial Services believes Swiggy's execution has improved notably, with the improvement in Quick Commerce AOV being an encouraging sign. However, the brokerage firm remains on the sidelines due to continued heightened competition in the sector.
MOFSL now values Swiggy's food delivery business on EV/EBITDA (FY27e) multiple and ascribes a 10% discount to Eternal. It said that Swiggy is growing faster, and once parity on EBITDA margin is achieved, this discount may not be warranted.
It reiterated 'Neutral' rating on the stock and raised the Swiggy share price target to ₹ 450 per share.
Swiggy share price has broken out of a bullish 89-day cup and handle pattern and has been sustaining above the breakout level for the past 33 days, forming a classic base-on-base structure, according to Anshul Jain, Head of Research at Lakshmishree Investments.
'This extended hold above the breakout zone strengthens the overall setup. Volume activity during the base phase showed clear signs of institutional accumulation, adding credibility to the breakout. Any retest of the breakout point around ₹ 379 should be viewed as a buying opportunity, offering a favorable risk-reward setup for investors looking to ride the next leg of the uptrend,' Jain said.
Swiggy share price has remained flat in one month, but has rallied 25% in the past three months. The stock has fallen 9% in six months and has dropped 27% on a year-to-date (YTD) basis.
At 11:15 AM, Swiggy share price was trading 2.06% lower at ₹ 395.50 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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