Swiggy 2027 target cut to ₹250-270 on Instamart losses

What changed in the broker view

JM Financial Institutional Securities has reset its stance on Swiggy and Eternal (formerly known as Zomato) as the quick commerce race widens the gap between Blinkit and Instamart. The brokerage expects 1QFY27 to reinforce a divergence in performance between the two platforms, with Blinkit likely to outperform. Against that backdrop, JM Financial lowered its target price assumptions for Swiggy and, in some notes, also moved its rating down.

The overall direction of the revision is clear. JM Financial is turning more cautious on Swiggy because it sees weaker visibility on a turnaround in Instamart and related businesses, and it is also tempering valuation multiples due to competitive intensity. At the same time, it continues to prefer Eternal, even after trimming its target price.

JM Financial on Swiggy: targets cut, rating turns cautious

JM Financial lowered its June 2027 target price on Swiggy to ₹250 per share, down from ₹280, after revising earnings estimates. As part of that revision, the brokerage cut its Funded Debt to EBITDA estimates by 8-9% for FY27 to FY29 and reduced its valuation multiple to 35x EV/adjusted EBITDA from 38x. JM Financial cited the possibility that margin expansion could slow from here.

Separately, JM Financial also downgraded Swiggy to ‘Reduce’ from ‘Add’ in another valuation note and slashed its March 2027 target price by 27% to ₹270. In that framework, the brokerage argued that it was assigning no value to parts of the business outside the core segments, and it went as far as stating that only a sale to a larger player could unlock value for shareholders.

There is also a more constructive JM Financial view in the supplied text, where the brokerage is described as retaining an ‘ADD’ rating while reducing a December 2026 target price to ₹400 from ₹460, largely because Instamart’s losses were expected to stay elevated.

Instamart losses are at the centre of the cut

JM Financial flagged Instamart’s continuing losses as a key challenge. In one estimate, the brokerage projected Instamart’s adjusted EBITDA loss to remain around ₹800-900 crore per quarter over the next 3-4 quarters.

In the same context, JM Financial reduced the Instamart valuation multiple to 0.25x EV/GOV from 0.5x EV/GOV. The message was that the segment’s current economics and limited near-term visibility warranted a lower valuation anchor.

Sum-of-the-parts: zero valuation for some Swiggy verticals

The sharpest target-price reduction is explained by a sum-of-the-parts (SOTP) approach in which JM Financial stripped out Instamart, supply chain, and platform innovations from its Swiggy valuation and assigned each a zero multiple. The brokerage said it was ascribing zero value due to a lack of visibility on a turnaround and a higher probability of prolonged value destruction.

Notably, JM Financial also did not give credit to Swiggy’s cash in that SOTP, valuing cash at zero with the view that it would keep depleting without a meaningful turnaround in the loss-making verticals.

As a result, the entire target market capitalisation in that framework was set at ₹75,300 crore, translating into a fair value of ₹270 per share, driven only by the food delivery and out-of-home segments.

Key valuation assumptions cited by the brokerage

JM Financial’s valuation assumptions in the text vary by note, but the critical parameters are explicit.

• In the SOTP behind the ₹270 target price, food delivery is valued at 38x FY28 adjusted EBITDA of ₹1,900 crore, reduced from 45x earlier to reflect rising competitive intensity.
• Out-of-home consumption is valued at 25x adjusted FY28 EBITDA, in line with the multiple the brokerage uses for peer Eternal’s dining-out business.
• Instamart plus supply chain and platform innovations are assigned zero value in that SOTP.

Elsewhere in the supplied text, JM Financial is also described as valuing Swiggy’s food delivery segment at 45x EV/adjusted EBITDA, Instamart at 0.5x EV/GOV, and out-of-home consumption at 1x EV/GOV in a separate calculation. That note also factors in ₹2,900 crore from an expected Rapido stake sale and references a target price of ₹440 per share versus a last close of ₹458, implying about 4% downside, with the brokerage citing a worsening balance sheet and intensifying competition.

Eternal: target trimmed, but ‘Buy’ stays

For Eternal, JM Financial cut its target price to ₹400 per share from ₹450, while maintaining a ‘Buy’ rating. The brokerage expects Blinkit’s sequential growth to moderate in Q3FY26, citing high competitive intensity and an unfavourable base due to an early festive benefit in Q2. Even so, the brokerage said improved profitability across Blinkit and food delivery keeps the stock positioned for a medium-term re-rating.

The supplied text also states Eternal remains a preferred pick in the listed Internet space, supported by industry tailwinds and a strong balance sheet, with net cash of ₹18,399 crore as of Sep’25.

What other broker calls in the text indicate

Nirmal Bang is cited as maintaining a ‘Buy’ rating on both counters, with a target price of ₹363 for Swiggy and ₹334 for Eternal. The mix of targets and ratings across broker notes underlines how sensitive valuations are to the trajectory of quick commerce losses and the pace of margin improvement.

Stock performance snapshot mentioned

The text also notes stock moves for Eternal. Eternal stock gained 1.5% in June and is down about 6.5% year-to-date in 2026. Separately, Swiggy is described as trading about 30% below its 52-week high.

Key figures and assumptions at a glance

What to watch from here

The next set of quarterly numbers, especially around quick commerce contribution margins and loss trajectory, will likely determine whether broker models continue to assign low or zero value to Instamart-related verticals. On the Eternal side, JM Financial’s commentary suggests investors will track whether Blinkit growth moderates as expected and whether profitability improvement continues across Blinkit and food delivery.

For both companies, the common thread in the broker notes is competitive intensity and how it changes the path to margin expansion. Any future target-price changes will likely hinge on whether loss-making segments stabilise and whether core businesses defend unit economics as competition remains elevated.