Brokerage Expects Blinkit to Extend Lead Over Instamart in FY27, While Swiggy Focuses on Profitability Amid Slower Growth and Leadership Changes

Shares of Swiggy Ltd. fell to a fresh all-time low on Tuesday, extending their prolonged decline as investors remained cautious about the company's growth prospects in India's fiercely competitive quick-commerce market. The stock touched an intraday low of ₹235.75, taking its decline to nearly 62% from its lifetime high of ₹617.30, recorded in December 2024.

The weak sentiment was further reinforced after JM Financial Institutional Securities lowered its target price on the stock from ₹280 to ₹250, citing slower growth expectations for Swiggy's quick-commerce platform Instamart compared with rival Blinkit. The brokerage believes the gap between the two companies is likely to widen during the first quarter of FY27, as Blinkit continues to expand aggressively while Instamart prioritises profitability.

Despite reporting improved financial performance and narrowing losses in the latest quarter, investors remain concerned about Swiggy's ability to sustain growth in an increasingly crowded quick-commerce landscape.

Stock Continues Its Prolonged Downtrend

Swiggy has remained one of the weakest-performing consumer internet stocks since the beginning of 2026.

Key performance highlights include:

• Nearly 62% decline from its all-time high.

• More than 8% fall during June.

• Around 39% decline on a year-to-date basis.

The stock has consistently underperformed the broader market, reflecting investor concerns over valuation, profitability, and intensifying competition in the online delivery ecosystem.

Significant Underperformance Compared to Peers

Swiggy's performance has lagged considerably behind its closest listed competitor, Eternal Ltd., the parent company of Blinkit.

While Swiggy has witnessed a sharp correction this year, Eternal has delivered relatively stable performance despite facing the same competitive environment.

This divergence highlights investors' increasing confidence in Blinkit's ability to scale operations while improving profitability.

Market participants now view the competition between Blinkit and Instamart as one of the defining themes in India's rapidly expanding quick-commerce sector.

JM Financial Turns More Cautious

JM Financial has revised both its earnings estimates and valuation assumptions for Swiggy.

Target Price Revision

The brokerage has also reduced its enterprise value multiple, reflecting expectations that operating margins may improve at a slower pace than previously anticipated.

Although the revised target still indicates potential upside from current levels, analysts believe investors are likely to remain cautious until growth momentum improves.

Blinkit Expected to Widen the Growth Gap

According to JM Financial, Blinkit is likely to maintain a clear lead over Instamart during the first quarter of FY27.

Expected Quarterly Growth

Blinkit

• Net Order Value (NOV) expected to grow approximately 18% quarter-on-quarter.

• Supported by:

  • Aggressive dark store expansion.

  • Seasonal demand.

  • Higher customer engagement.

  • Market share gains.

Instamart

• Expected NOV growth of approximately 5% quarter-on-quarter.

• Slower growth due to:

  • Greater emphasis on profitability.

  • Rationalisation of low-margin orders.

  • Controlled expansion strategy.

The brokerage believes this divergence could become more evident in the coming quarters.

Profitability Takes Priority

Unlike competitors that continue to prioritise rapid expansion, Swiggy has increasingly focused on improving unit economics.

Management has been working towards:

• Reducing cash burn.

• Improving contribution margins.

• Optimising delivery costs.

• Increasing operational efficiency.

• Rationalising promotional spending.

While these initiatives strengthen long-term financial sustainability, they may temporarily limit order growth and market share expansion.

The market will closely monitor whether Swiggy can improve profitability without sacrificing customer growth.

Quarterly Results Show Operational Improvement

Despite the weak stock performance, Swiggy's latest financial results demonstrated encouraging operational progress.

During the fourth quarter of FY26:

• Revenue from operations increased 45% year-on-year to ₹6,383 crore.

• Net loss narrowed to approximately ₹800 crore, compared with ₹1,081 crore in the corresponding quarter last year.

The improvement reflects stronger order volumes, better cost control and improving efficiency across multiple business segments.

However, analysts believe the path to sustained profitability remains challenging.

Leadership Changes Add to Investor Concerns

Swiggy's quick-commerce business recently witnessed two significant senior management departures.

The resignations included:

• Chief Operating Officer (COO).

• Chief Business Officer (CBO).

Although management transitions are not uncommon in high-growth technology companies, such changes often create uncertainty during periods of intense competition.

Investors will be watching closely to see how the leadership team executes its long-term strategy going forward.

Quick Commerce Competition Intensifies

India's quick-commerce industry has become one of the country's fastest-growing digital businesses.

Leading players continue investing aggressively in:

• Dark store expansion.

• Hyperlocal delivery networks.

• Technology platforms.

• Customer acquisition.

• Product assortment.

• Delivery speed.

Major competitors now include:

• Blinkit.

• Instamart.

• Zepto.

• Amazon's rapid delivery platform.

• Several regional operators.

The intense competitive environment continues to place pressure on margins despite robust industry growth.

Dark Stores Becoming the Key Competitive Advantage

Industry analysts increasingly view the expansion of dark stores as a critical determinant of success.

A larger fulfilment network enables companies to:

• Deliver orders faster.

• Increase product availability.

• Improve customer retention.

• Enhance order frequency.

• Reduce delivery distances.

Blinkit has significantly accelerated its dark store rollout, while Swiggy has adopted a comparatively measured expansion strategy focused on improving returns on investment.

Valuation Reflects Market Uncertainty

JM Financial also lowered its valuation multiple, citing expectations that:

• Margin expansion may slow.

• Competitive intensity will remain elevated.

• Profitability improvements could take longer than expected.

These factors resulted in the brokerage reducing its June 2027 target price to ₹250.

The revised valuation reflects a more conservative outlook for India's quick-commerce sector.

Industry Growth Story Remains Intact

Despite near-term competitive challenges, analysts remain optimistic about the long-term outlook for quick commerce in India.

Key structural drivers include:

• Rapid urbanisation.

• Growing digital adoption.

• Increasing smartphone penetration.

• Higher disposable incomes.

• Demand for convenience.

• Expansion into Tier-II and Tier-III cities.

Industry experts expect online grocery and instant delivery services to continue growing at a strong pace over the next decade.

Key Factors Investors Should Watch

Going forward, market participants are likely to focus on:

• Instamart's quarterly order growth.

• Dark store expansion.

• EBITDA improvement.

• Customer acquisition costs.

• Gross order value.

• Cash burn.

• Margin performance.

• Competitive pricing strategy.

Execution across these metrics will largely determine Swiggy's future market valuation.