Quick Commerce Regains Momentum as Competitive Intensity Eases
India’s food delivery and quick-commerce (QC) platforms are entering 2QFY27 with improving growth momentum, as competitive intensity moderates and demand benefits from festive seasonality. Channel checks indicate a sharper recovery in QC, with net order value (NOV) growth for Blinkit and Instamart expected to accelerate to 22.7 per cent and 14.4 per cent QoQ in 2QFY27, respectively, compared with 19.1 per cent and 3.1 per cent in 1QFY27. The improvement suggests that the QC market is moving beyond the recent phase of aggressive customer acquisition and subsidy-led competition toward healthier demand-led growth. Food delivery remains comparatively stable, with gross order value (GOV) growth likely to remain in the 18-22 per cent YoY range for both major platforms. The segment continues to benefit from a mature user base, increasing order frequency and improving operating leverage. Margin trends are also gradually turning favourable, supported by better delivery density and scale. Swiggy’s food delivery contribution margin is expected to improve to around 7.8 per cent of GOV, while continued cost efficiencies should support gradual EBITDA margin expansion across the segment. QC is seeing a broader recovery in demand, supported by store additions, improving customer acquisition and festive seasonality. Blinkit is expected to deliver around 23 per cent QoQ NOV growth in 2QFY27, with orders potentially reaching 4.5m per day. Instamart is also expected to recover to around 14 per cent QoQ NOV growth, with momentum potentially strengthening into 3QFY27. The quality of growth is increasingly shifting toward user-led demand, while the pruning of low-value users at Instamart appears largely complete, allowing greater focus on customer acquisition. Profitability, however, remains uneven across platforms. Blinkit is approaching breakeven, with adjusted EBITDA margin expected at around 1 per cent of NOV, supported by scale and lower fixed-cost intensity. Instamart continues to prioritize market-share gains, with contribution margin likely to remain near the lower end of its 0 per cent to -1 per cent guardrail. Elevated marketing and competitive spending could keep QC losses high in the near term. The 80–85bp benefit from the transition to IOCC provides some operating support, although this is likely to be absorbed by higher customer acquisition and promotional expenditure. Competitive intensity remains a key industry variable. E-commerce entrants such as Flipkart Minutes and Amazon Now are continuing to use aggressive discounts during the festive period, creating pressure on near-term unit economics. However, the sustainability of subsidy-led expansion remains uncertain as the festive period passes. A continued moderation in competitive intensity, combined with improving order density and store productivity, could allow QC platforms to shift greater focus from customer acquisition toward profitability. Overall, the sector outlook is turning more constructive as QC growth re-accelerates while food delivery maintains steady growth and improving margins. The next phase of the industry is likely to be defined by the ability to convert higher order volumes into stronger unit economics, rather than simply adding users or stores. Scale, network density, customer retention and disciplined promotional spending should increasingly determine the sustainability of growth and the pace of profitability improvement across the sector.
Eternal – TP: ₹430
Eternal is positioned to benefit from a renewed acceleration in quick-commerce growth, with Blinkit’s NOV growth likely to improve to ~23 per cent QoQ in 2QFY27 from ~19 per cent in 1QFY27, supported by easing competitive intensity, festive seasonality and continued store additions. Blinkit’s scale leadership, ~4.5m expected orders per day and improving unit economics should support its path toward profitability, with adj. EBITDA margin expected at ~1 per cent of NOV. Food delivery remains a stable earnings contributor, with ~20 per cent YoY GOV growth and gradual margin improvement providing balance to the higher-growth quick-commerce business. The moderation in subsidy-led competition from e-commerce entrants after the festive period could further improve industry economics, strengthening Blinkit’s growth and profitability trajectory.
