In its newest observe, Nuvama famous that Swiggy is “one of many largest hyperlocal supply firms in India,” and has proven a turnaround in execution following just a few strategic missteps.
“Its Meals Supply is now outgrowing Zomato’s, thereby spurring market share stability and margin pickup,” the brokerage acknowledged, including that whereas Q-com can also be “shifting in the correct path,” it nonetheless faces some “execution delays.”
Nuvama’s SOTP valuation assigns the majority of the worth to the Meals Supply enterprise, citing its superior scale and profitability profile.
For Fast Commerce, the agency assumes a decrease valuation because of an execution hole and variations in scale and profitability, particularly when in comparison with rival Blinkit.
The brokerage values the Meals Supply arm at Rs 300/share, primarily based on 40x Sep-27E EBITDA, representing a ~33% implied low cost to Zomato. The Q-com vertical is valued at Rs 144/share, primarily based on 0.8x Sep-27E NOV, which is a 50% implied low cost to Blinkit.
Meals supply: A turnaround in movement
In line with Nuvama, Swiggy has emerged from a section of missed alternatives, notably between FY19 and FY24, when it ceded management in meals supply and misplaced floor in Q-com regardless of being an early mover.Nevertheless, “the tide now seems to be turning” as the corporate’s Meals Supply vertical has outpaced Zomato’s for 4 consecutive quarters, aided by bettering profitability.
The brokerage notes that Swiggy’s Fast Meals Supply (QFD) technique is gaining traction, serving to the corporate scale as much as 700-plus cities and 10–12% of GOV, in distinction to Zomato’s scale-back of QFD for restaurant companions. EBITDA margins have improved considerably, with adjusted EBITDA margin shifting from –0.2% in FY24 to 2% of GOV in FY25, with additional enlargement anticipated to six% of GOV in FY26 and 9% in FY27.
Swiggy’s adjusted EBITDA is projected to ship a ~54% CAGR over FY25–28E, Nuvama stated.
Q-com: Nonetheless maturing, however displaying promise
Whereas Swiggy’s Q-com enterprise has trailed rivals because of non-retail DNA and previous execution challenges, Nuvama believes latest management adjustments and strategic investments are bringing higher construction.
Publish-IPO, GOV development accelerated to over 100%, supported by deeper investments in darkish retailer capability and buyer acquisition.
Instamart, Swiggy’s Q-com arm, reported losses of INR 8–9 billion because of warehousing and buyer acquisition prices. Nevertheless, Nuvama expects enchancment, noting that “Instamart reported a significant enchancment in AOV in H1FY26, and we forecast losses shall slim as retailer utilisation scales up.”
The agency added that Swiggy is among the many High-3 Q-com platforms in India with over 1,102 darkish shops, and stays dedicated to narrowing the hole with Blinkit and Zepto by way of GOV and unit economics.
