Swiggy, India’s second-largest foodtech platform, is expected to report a 28% compound annual revenue growth over FY25–28 and turn profitable at the Ebitda level by FY27. IIFL forecasted margin expansion in both food delivery and QC, with the latter projected to grow more than fourfold by FY28.
Execution lags, not competitive disadvantage
IIFL acknowledged that Swiggy is behind Eternal (Zomato) by 7–8 quarters in terms of gross order value and Ebitda margins in both food delivery and QC. However, the brokerage attributed this gap to “slower execution in the past rather than a competitive disadvantage.”“Swiggy’s market share shrunk from 46.5% in FY22 to 42.4% in 1QFY25. We believe this was largely on account of execution issues rather than any competitive disadvantage,” the brokerage said.
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Despite trailing market leader Zomato in user metrics and gross order value, Swiggy has begun to regain share over the last two quarters through sharper execution and initiatives like its 10-minute delivery service, Bolt, which now contributes 12% of order volumes. The company is estimated to hold a 43% share of the food delivery market, which IIFL believes will remain a stable duopoly over the long term.
The food delivery business is expected to grow at an 18% CAGR over FY25–28, with Adjusted Ebitda margins reaching 20% by FY28. Swiggy’s contribution margin stood at 7.1% of gross order value (GOV) in FY25, rising to 7.8% in the March quarter, with gains driven by better monetisation, higher advertising revenue, and cost optimisation.
“We expect Ebitda margins approaching ~5% of GOV by FY28 and stabilising at those levels in the long term,” the brokerage said.
IIFL values Swiggy’s food delivery business at $8.5 billion. Given Swiggy’s current market capitalization of $10.3 billion, the remaining value ascribed to its QC and other businesses stands at just $1.8 billion, an 88% discount to Blinkit despite being only about half its size. The brokerage said it believes this gap offers meaningful re-rating potential if execution in QC improves.
The stock currently trades at 4.1x FY26 estimated EV/Sales, well below Indian internet peers. IIFL expects this gap to narrow as Swiggy scales profitably across verticals. Key risks flagged include heightened competition and potential regulatory changes.
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