Why Quick Commerce Margins Are Slipping Further for Swiggy and Blinkit

India’s quick commerce growth story is hitting a reality check. As competition heats up and the government nudges platforms away from ultra-fast delivery promises, margins—once expected to recover soon—are now slipping further into the future.

Global brokerage UBS has cut its EBITDA margin estimates for major players Eternal (Zomato and Blinkit) and Swiggy, citing intensifying competition, rising discounts and a shifting regulatory environment.

In a report released on Wednesday, UBS said margin recovery in quick commerce is now likely to be pushed back by a few quarters. As a result, it has reduced Eternal’s adjusted QC EBITDA estimates for FY26–27 by 15–20%, while trimming Swiggy’s QC margins by 100–120 basis points.

The downgrade follows a key policy development. A day earlier, the government asked major delivery aggregators to remove the mandatory 10-minute delivery deadline, a move aimed at improving safety and working conditions for gig workers. While the step addresses labour concerns, it also underscores the cost pressures baked into ultra-fast delivery models.

UBS noted that competition in the Indian quick commerce space has intensified since September 2025 and remains elevated into January 2026. Channel checks, discount analysis and app usage data from Sensor Tower suggest that aggressive pricing is likely to continue, delaying profitability.

Discounting, in particular, has surged. UBS estimates that discounts across QC platforms have increased by 200–300 basis points compared with September levels, and rose further in January 2026 versus November 2025. Among major players, Amazon and Zepto are offering the deepest discounts, while Blinkit, though still the most disciplined, is also discounting more than before.

Despite the margin pressure, UBS said gross order value (GOV) and net order value (NOV) estimates for Swiggy remain broadly unchanged, while Eternal’s GOV and NOV have been marginally raised. The brokerage has also left its food delivery estimates for FY27–28 largely intact.

On food delivery, the outlook appears more stable. UBS said industry growth is improving, with December 2025 receipts data indicating volume growth of around 16% in Q3FY26, compared with 7–10% in the previous three quarters. The improvement has been driven by lower average delivery value initiatives that encouraged higher usage among existing customers.

However, weaker QC margin visibility has prompted UBS to cut price targets. The revised targets stand at ₹375 for Eternal and ₹510 for Swiggy.

Taken together, the message is clear: quick commerce is still growing, but the path to sustainable margins is getting longer and more expensive.

(ANI and yMedia are the content partners for this story)