India's leading food delivery and quick commerce platform Swiggy Ltd. is once again in the spotlight following its Q1 FY26 earnings announcement. Despite a widening loss in the June quarter, global brokerages like Jefferies and Morgan Stanley remain bullish on the stock’s long-term potential.
Swiggy reported a net loss of ₹1,197 crore for the June 2025 quarter, nearly double the loss of ₹611 crore reported in the same period last year. The steep decline in profitability was largely attributed to rising losses in the Quick Commerce (Instamart) division.
Instamart EBIT Loss (Q1 FY26): ₹797 crore
Instamart EBIT Loss (Q1 FY25): ₹379 crore
This indicates that while Swiggy's quick delivery business continues to grow in scale, its operational efficiency remains under pressure.
Despite rising losses, Swiggy's revenue rose to ₹4,961 crore, marking a 54% increase from ₹3,222 crore in the same quarter last year. The growth was led by strong performance in both food delivery and quick commerce segments.
However, EBITDA losses also widened, with the company reporting a ₹954 crore EBITDA loss, compared to a ₹544 crore loss in Q1 FY25.
Global brokerage Jefferies has upgraded Swiggy from ‘Hold’ to ‘Buy’, raising its price target to ₹500. The firm termed the stock a “high-risk, high-reward” play, citing long-term potential despite near-term financial setbacks.
Food delivery growth remained strong in Q1.
Quick commerce momentum held up due to higher average order values (AOVs).
Margins were impacted by higher rider payouts and staff compensation revisions.
Jefferies believes that profitability has bottomed out in Q1, especially with a pause in dark store expansion and reduced competition in the quick commerce sector.
Another global brokerage, Morgan Stanley, also maintained its bullish stance on Swiggy, assigning it an ‘Overweight’ rating with a revised target price of ₹450.
Food delivery growth is in line with earlier expectations.
While margin expansion has slowed, the company continues to maintain solid unit economics.
Q2 commentary was strong, leading the brokerage to raise profitability assumptions for the Instamart business.
Loss projections have been revised downward based on improving fundamentals.
Swiggy shares ended 0.7% higher at ₹403.95 on Thursday, staying above its IPO price of ₹390. However, the stock remains under pressure overall, down 25% year-to-date.
Investors are closely watching how the company balances growth with improving unit economics, especially in the quick commerce space, which remains a cash-intensive vertical.
A critical part of Jefferies' upgraded outlook is based on Swiggy’s decision to pause further expansion of dark stores, which power its quick commerce operations. This move is expected to reduce capital expenditures and improve operational efficiency in the short term.
Additionally, the easing of competitive pressure from rivals like Blinkit and Zepto could give Swiggy more room to improve margins without compromising growth.
While the financials from Q1 have raised concerns, analysts maintain a positive long-term outlook for Swiggy. The continued growth in both food delivery and quick commerce—combined with strategic cost control measures—may help the company return to a path of profitability over the next few quarters.