Swiggy shares: Anand Rathi upgrades food delivery stock to 'buy' giving 3 reasons | Target price, rating, rationale

Swiggy share price: Brokerage firm Anand Rathi has upgraded the quick food delivery stock Swiggy to ‘buy’, while keeping target price unchanged at ₹310. This valuation is based on 30 times the estimated adjusted EBITDA for FY28, after accounting for financial obligations, and reflects a valuation discount of around 15% compared with Zomato.

The brokerage firm further said that Swiggy is moving away from a business model where it had to sacrifice profitability to achieve faster growth. Over the past four quarters, the company has focused more on improving its contribution margin (CM) rather than pursuing growth at any cost. As a result, its contribution margin improved from a loss of around 5.6% in Q4FY25 to breaking even in Q1FY27. This signals a shift towards a business model where Swiggy can grow its business while also improving profitability.

Anand Rathi reviews Swiggy's long-term roadmap

Shift in First-Party Inventory Model

Swiggy restricted foreign shareholding to 49.5% recently, which gives Instamart the compliance clearance to move towards a direct inventory-led model by Q3.

“We expect this to unlock Rs4-5/order in contribution margin translating to ~80-100bps of margin benefit,” the brokerage firm said.

Instead of continuous capex to chase footprint size, Instamart is leveraging asset efficiency with ~1,171 active dark stores in 125 cities (it added ~28 dark stores in Q1FY27 vs. 200 addition by Blinkit), with its current network capable of doubling its GOV without significant physical network expansion.

Diversification into High-Margin Non-Grocery Space

It is also focusing on non-grocery categories, now account for ~30% of Instamart's total business. These categories command higher ticket size and superior retail margin vs. thin-margin grocery staples. Expansion of clean-food and private-label brands like Noice drives contribution-margin positive inflows.

Swiggy share price performance

Swiggy shares have remained under pressure over the longer term, despite registering a marginal gain in the past week. The stock has risen 0.11% over the last one week, while it has declined 15.67% over the past month, indicating continued weakness in recent trading sessions.

The stock's performance has also been disappointing over the longer term, falling 41.07% year-to-date (YTD) and 46.72% over the past one year.