Swiggy Upgraded to Buy as Food Delivery and Quick Commerce Show Strong Growth Potential
Swiggy's upgraded Buy rating reflects a turning point in its food delivery business and improved unit economics in quick commerce. The company's strategic focus on optimizing infrastructure and selectively expanding dark stores positions it for steady growth and margin expansion.
Average order value in quick commerce is rising, enhancing visibility toward breakeven. New offerings like Snacc and '99 Store' aim to capture additional consumption occasions, broadening the user base and order frequency.
The shift from aggressive expansion to cost efficiency is expected to drive margin improvements. With food delivery growth stabilizing and Instamart's economics strengthening, Swiggy's path to profitability appears increasingly clear. Analysts value the food delivery segment at 35x FY27E adjusted EBITDA, deriving a target price of ₹550—a 26% upside from current levels.
