InstaMart intends to trade margin for growth: Well-funded to weather near-term headwinds; retain Buy

Research evidence excerpt

InstaMart intends to trade margin for growth: Well-funded to weather near-term headwinds; retain Buy

Nomura | Swiggy 30 July 2026

Company profile

Swiggy is one of India’s leading last-mile food delivery and quick commerce service provider. Swiggy’s platform allows users to search restaurants

and order, book tables at restaurants, and also order a wide range of groceries and everyday essential items. Swiggy’s mission is to elevate the

quality of life of urban consumers by offering convenience. The company Swiggy launched food delivery business in 2014 and quick commerce

business in 2020.

Valuation Methodology

We have given a SOTP target of INR435. We have given a 40x EV/EBITDA multiple to FY28F EBITDA to value the food delivery business as it is

now a duopoly market which is moving towards 15-20% steady- state growth and improving EBITDA margins due to scale benefits. We have given

0.4x multiple to FY28F NOV to value the quick commerce business because it is currently loss making, and we expect adjusted EBITDA to

breakeven only by 1QFY29F.

Risks that may impede the achievement of the target price

Entry of new players in Food delivery business, higher than expected cash burn in Quick commerce or an overall consumer slowdown are key risks

to our Buy rating.

ESG

Swiggy seeks to minimize its environmental footprint and promote sustainability across its operations, value chain, and digital ecosystem. Swiggy

has established a multi-tiered ESG governance framework to ensure robust oversight and integration of environmental, social, and governance

priorities across the organization. Oversight is provided by the Board-level Sustainability and CSR Committee with the relevant functions responsible

for implementation.