Shares of Swiggy Ltd plunged 7 per cent in Monday's trade following the online food delivery platform's March quarter results. Analysts said the company's food delivery segment was on track, with new initiatives scaling well. That said, the quick commerce (QC) segment is a concern, they said noting that Instamart's net order value  (NoV) growth slowed to 3.6 per cent sequentially in the March quarter compared with 11.4 per cent sequential growth in December quarter and 17.5 per cent quarter-on-quarter (QoQ) in the September quarter. Barring this, they are largely positive on the stock prospects, with their target prices, following Monday's fall, hinting at up to 100 per cent potential upside. 

"QC earnings cuts have contributed to target cut from Rs 600 to Rs 520. We think Swiggy continues to present a great risk-reward skew at current market price. Maintain BUY," said ICICI Securities. The target, following a 6.98 per cent fall on Swiggy, still suggests 100 per cent upside over the prevailing price of Rs 261.20 apiece. 

Elara Securities said it is not valuing Instamart on near-term profitability metrics, given limited visibility on sustainable Ebitda margin. It said while contribution margin (CM) break-even is imminent, the path to Ebitda breakeven could be materially longer against Blinkit, which achieved this milestone roughly four quarters post CM break-even. 

"Given lower scale, moderating growth, and elevated competition, Instamart's Ebitda profitability timeline could take more than twice as long, with adjusted Ebitda losses moderating to Rs 160 crore by FY28E, implying Rs 1,900 crore cash burn reduction vs current levels," Elara said. 

The brokerage has slashed its target on the stock to Rs 360 from Rs 425 earlier. It said better-than-estimated QC growth with improving profitability remain key monitorables for an upgrade.

Swiggy's management reiterated their guidance of 18–20 per cent YoY growth while targeting an adjusted Ebitda margin of 5 per cent in the medium term. 

"We are tweaking FY27E/28E Ebitda by 4.6 per cent/1.3 per cent factoring in growth moderation with margin trajectory unchanged; retain ‘Buy’; revised target price of Rs 477. The stock trades at 1.8 times FY28E EV/sales," Nuvama said.

HDFC Securities said while FD KPIs showed consistent improvement, the gap in performance between Instamart and Blinkit is becoming increasingly apparent. QC losses seem to have peaked, and at current valuations, Instamart is effectively available for free, it said.

"Our overall Adj. Ebitda loss estimates stand revised at Rs 15.6/Rs 390 crore (earlier: Rs 14.6/-Rs 370 crore) for FY27/28 respectively. We maintain our BUY rating on the stock with an SOTP-based TP of Rs 460/share," it said.