Buy Swiggy; target of Rs 440: Motilal Oswal

Buy

Motilal Oswal's research report on Swiggy

Swiggy delivered a revenue of INR61.5b in 3QFY26 (up 54.6% YoY) vs. our estimate of INR57.7b. The food delivery (FD) business’s GOV grew 20.5% YoY, whereas the contribution margin (CM) remained improved 30bp QoQ at 7.6%. FD’s adj. EBITDA as a % of GOV margin improved 20bp QoQ to 3.0% vs. our est. of 2.9%.Instamart’s GOV was INR79.3b (up 103% YoY) vs. our estimate of INR80.4b. The contribution margin expanded 9bp QoQ to -2.5%. Adjusted EBITDA as a % of GOV was -11.4% (-12.1% in 2Q), below our estimate of -9.9%.

Outlook

We value the FD business at 35x FY27E EV/EBITDA and QC using DCF. We reiterate our BUY rating with a TP of INR440, implying a potential upside of 34%.

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