Anand Rathi Research has upgraded Swiggy to Buy with a ₹310 target, arguing that improving contribution margins and resilient food delivery could help fund the company’s quick-commerce losses.
Swiggy’s shares have begun to recover after slipping to a record low, as Anand Rathi Research moved the stock to a “Buy” and set a target price of ₹310. At the current price of ₹233.50, the brokerage sees upside of about 32.76% and argues that the market is underestimating the company’s improving operating profile.
The call rests on a marked change in Swiggy’s priorities. According to Anand Rathi, the company has spent the past year shifting away from the old playbook of chasing growth at almost any cost and towards protecting contribution margin, the profit left after direct delivery expenses. That shift has helped lift contribution margin from a low of about negative 5.6% in the March quarter of FY25 to break-even in the June quarter of FY27, a turnaround the brokerage says signals a new phase in which growth is more closely tied to profitability.
The quick-commerce business, which has been a source of investor anxiety because of heavy losses and intense competition, now appears to have stabilised. Even so, the food delivery arm remains the company’s key earnings engine. Anand Rathi said the segment delivered an EBITDA margin of around 3.1% in the June quarter of FY27, while gross order value rose 17.4% from a year earlier, underscoring that the mature business is still doing most of the heavy lifting.
The brokerage also believes the food delivery franchise can eventually subsidise the drag from quick commerce. It expects cash flows from food delivery, together with treasury income, to cover operating losses in quick commerce by FY28 or the first half of FY29. Swiggy had cash of about ₹14,000 crore at the end of the June quarter of FY27, according to the brokerage, which also argued that the stock trades at about 23 times estimated EBITDA for FY28, giving investors what it described as free exposure to quick commerce and dining out.
Still, the investment case is not without clear risks. Anand Rathi warned that Swiggy could lose market share if competition remains fierce, while a slowdown in consumption could pressure growth in food delivery. Separate market reports have also shown how fragile sentiment remains: the stock has recently touched fresh lows after a steep decline this year, even as some brokerages continue to back the name on the basis of longer-term growth and margin improvement. Reuters-style market coverage of the wider sector has likewise noted that investors are still weighing whether the recent pullback offers value or merely reflects ongoing doubts about the pace of Swiggy’s turnaround.
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