Sustainable profitable growth delivered despite adverse seasonality and macro uncertainties
Quick commerce (QC) NOV growth and margin delivery both beat consensus estimates, with improving outlook for Q1FY27. We think an inflationary environment from mid-May’26 is likely to boost growth rates even further. Over the medium term, management guided for QC NOV to grow at ~60% CAGR and consol. adj. EBITDA to reach USD 1bn by FY29E. This will likely be driven by a combination of: 1) better assortment; 2) expanding presence beyond its top-8 cities; and 3) improving demand density in the next 7 cities (after Delhi NCR). Food delivery (FD) growth continued to accelerate driven by improving affordability (lower min. order value, targeted activation and curated assortment) with a 10bps QoQ EBITDA margin uptick. We note, QC overtook FD in Monthly Transacting Users (MTU) share for the first time in Q4FY26. Going out grew sequentially, with margin expansion despite adverse seasonality. Reiterate BUY.
Q4FY26 performance review
Revenue in Q4FY26 was INR 172.9bn (up 6.0% QoQ/196.5% YoY). EBITDA was INR 4.9bn (up 32.1% QoQ/575% YoY). EBITDA margin was 2.8% (up 55bps QoQ/158bps YoY). PAT was INR 1.7bn (up 70.6% QoQ/346.2% YoY).
Adj. revenue in Q4FY26 was INR 176.8bn (up 5.9% QoQ/185.7% YoY). Adj. EBITDA was INR 4.3bn (up 17.9% QoQ/160% YoY), 5.7% higher than our estimates. Adj. EBITDA margin (as a % of adj. revenue) was 2.4% (up 25bps QoQ/down 24bps YoY) vs. our estimate of 2.1%.
Food delivery (FD)
In Q4FY26, FD NOV growth accelerated to 18.8% YoY (down 0.9% QoQ) to INR 97.6bn. Adj. revenue was INR 31.3bn, up 2.4% QoQ/29.7% YoY.
Contribution margin (as a % of NOV) was 10.2% (down 20bps QoQ/10bps YoY). Adj. EBITDA (as a % of NOV) was 5.5% (up 10bps QoQ/30bps YoY), growing 24.3% YoY to INR 5.3bn.
Average MTU grew 2.0% QoQ/21.5% YoY to 25.4mn (vs. 24.9mn in Q3FY26).
Valuation We maintain BUY with a three-stage DCF-based unchanged target price of INR 360. Risks: Slowdown in discretionary spending and negative externalities disrupting business operations.
