Synopsis : JM Financial believes Blinkit is widening its lead over Swiggy's Instamart as stronger order growth, improving profitability and rapid dark store expansion strengthen Eternal's position in India's quick commerce market. The brokerage remains bullish on Eternal while staying cautious on Swiggy due to slower growth and continued losses at Instamart.
India's quick commerce industry is entering a new phase where scale, execution and profitability are becoming just as important as customer acquisition.
According to JM Financial, the June quarter is expected to further highlight the growing performance gap between the country's two listed quick commerce players—Blinkit and Instamart.
The brokerage believes Blinkit, owned by Eternal Ltd., continues to strengthen its leadership position through faster growth, improving operating leverage and aggressive expansion of its dark store network. Meanwhile, Swiggy's Instamart is prioritising profitability over rapid expansion, resulting in slower growth despite favourable industry conditions.
Blinkit expected to widen its lead
JM Financial expects Blinkit to significantly outperform Instamart during the June quarter, with stronger order growth and improving profitability.
The brokerage believes seasonal demand, higher consumer spending during the IPL season and continued expansion of Blinkit's delivery network will help the business accelerate further.
"We expect Q1FY27 to reinforce the widening divergence between the listed quick commerce competition as Blinkit is likely to significantly outperform Instamart on growth," JM Financial said.
It added that Blinkit's quarterly growth could positively surprise investors, while Instamart's balance between growth and profitability will remain a key monitorable.
JM Financial raises target price on Eternal
JM Financial has retained its 'Buy' rating on Eternal Ltd. while increasing its 12-month target price from ₹400 to ₹440.
The revised target implies an upside potential of nearly 70% from current levels.
The brokerage said Blinkit continues to be Eternal's biggest growth engine, benefiting from expanding scale, higher operating leverage and sustained consumer demand.
The valuation revision reflects the brokerage's confidence in Blinkit's long-term growth prospects while rolling forward its valuation framework to June 2027.
Blinkit likely to deliver another strong quarter
JM Financial expects Blinkit's Net Order Value (NOV) to increase by 17.7% sequentially during the June quarter to around ₹16,900 crore.
This would represent a significant acceleration from the previous quarter's growth of 8.2%.
The brokerage believes summer demand, IPL-led consumption and continued expansion of the dark store network will drive higher order volumes.
Profitability is also expected to improve meaningfully.
Adjusted EBITDA is projected to increase to around ₹125 crore from nearly ₹37 crore in the previous quarter, supported by operating leverage as revenues grow faster than fixed costs.
According to JM Financial, Blinkit's expanding scale is beginning to deliver stronger financial outcomes without proportionately increasing operating expenses.
Food delivery business remains stable
Apart from Blinkit, Eternal's food delivery business is also expected to maintain healthy growth.
JM Financial estimates gross order value growth of approximately 19.2% year-on-year during the June quarter.
Adjusted EBITDA margins are expected to remain broadly stable at around 5.4%, with operating leverage helping offset annual salary revisions and higher delivery expenses.
The brokerage believes the steady cash generation from food delivery continues to fund Blinkit's aggressive expansion strategy while maintaining healthy consolidated profitability.
Dark store expansion strengthening competitive advantage
Blinkit's rapid expansion of dark stores remains one of the biggest pillars supporting JM Financial's bullish outlook.
The brokerage expects the larger fulfilment network to improve delivery efficiency, reduce fulfilment costs and increase order density across existing markets.
A denser network also enables Blinkit to expand into new cities while improving customer experience through faster deliveries.
JM Financial believes this growing scale advantage is becoming increasingly difficult for competitors to replicate.
Swiggy retains 'Reduce' rating
While remaining optimistic on Eternal, JM Financial continues to maintain a 'Reduce' rating on Swiggy.
The brokerage has also lowered its target price from ₹280 to ₹250, indicating only limited upside from current levels.
According to JM Financial, Swiggy's current strategy prioritises improving profitability over aggressive expansion in Instamart.
Although this approach has helped reduce losses, it has also resulted in noticeably slower growth compared to Blinkit.
Instamart growth remains subdued
JM Financial expects Instamart's Net Order Value to increase by only 5.2% sequentially during the June quarter, substantially below Blinkit's projected growth.
Contribution margins are expected to turn marginally positive after improving during recent quarters.
However, adjusted EBITDA losses are still projected to remain elevated at approximately ₹760 crore, only slightly better than the previous quarter's ₹860 crore loss.
The brokerage believes investors will continue focusing on whether Swiggy can successfully balance profitability and growth without sacrificing long-term market share.
According to JM Financial, moderating growth combined with elevated fixed costs makes achieving EBITDA breakeven increasingly challenging for Instamart.
Food delivery margins face pressure
Swiggy's core food delivery business is expected to continue growing, with JM Financial forecasting gross order value growth of nearly 18.9% year-on-year.
However, adjusted EBITDA margins are expected to decline to around 3% from 3.3% in the previous quarter.
Annual salary revisions and higher delivery-related costs are likely to weigh on profitability.
Reflecting this softer outlook, JM Financial has reduced its EBITDA estimates for Swiggy's food delivery business across FY27 to FY29 while also lowering its valuation multiple.
No valuation assigned to Instamart
One notable aspect of JM Financial's valuation methodology is that it continues assigning no value to Instamart and Swiggy's other loss-making businesses.
The brokerage also excludes Swiggy's cash balance from its valuation because of continued cash burn at the consolidated level.
"We continue to assign no value to Instamart and other loss-making businesses while excluding cash from our valuation owing to the continued high cash burn at a consolidated level," JM Financial said.
It added that it remains unconvinced the current strategy will lead to a meaningful turnaround for Instamart over the medium term.
What investors should watch
JM Financial believes the June quarter will provide further evidence of Blinkit's strengthening leadership in India's rapidly evolving quick commerce industry.
Investors will closely monitor Blinkit's ability to sustain high growth while continuing to improve profitability, particularly as its dark store network expands across the country.
For Swiggy, the key question remains whether Instamart can accelerate growth without significantly worsening losses, especially as competitive intensity within quick commerce continues to remain high.
Disclaimer : The brokerage views, target prices and financial estimates mentioned in this article are based on research published by JM Financial and are intended solely for informational and educational purposes. They should not be construed as investment advice or a recommendation to buy, sell or hold any security. Investments in equity markets are subject to market risks, competitive dynamics and company-specific developments. Readers should conduct their own due diligence and consult a SEBI-registered investment advisor before making any investment decisions.
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