India’s Internet Economy Poised for Robust Growth, According to Morgan Stanley
New Delhi, India – August 15, 2026: A recent report from Morgan Stanley highlights the formidable potential for long-term growth within India’s internet economy, influenced by the surging adoption of digital technologies.
This growth trajectory is anticipated to bolster sectors such as online food delivery, e-commerce, and logistics, while enhanced operational scale may improve profitability margins.
The global brokerage firm noted that India’s internet stock market has witnessed a pronounced rebound, with the Indian Internet market capitalization index rising approximately 20% since early June.
This contrasts with a more modest 6% increase in the Nifty 50 index during the same period, illustrating the index’s 18% outperformance over the Nifty 50 in the last four months.
According to Morgan Stanley, the various sectors of India’s internet landscape are positioned for structural growth.
This positive outlook is driven by escalating digital penetration, higher transaction volumes, and a trend towards outsourcing. However, challenges such as competitive pressure and the pace of monetization represent critical factors impacting profitability.
- Morgan Stanley projects that India’s food delivery gross order value (GOV) will soar to approximately ₹2 trillion by fiscal year 2031, anticipating an increase in online food delivery penetration from 15% in FY26 to 20%.
- The firm identifies a burgeoning market in affordable food delivery, where reduced average order values may be counterbalanced by lower operational costs.
- Furthermore, significant growth opportunities are evident in India’s e-commerce logistics market, with e-commerce shipments, excluding grocery items, expected to rise to between 15 and 16 billion by FY30. Current per capita shipment levels remain considerably lower than those in the US and China.
Morgan Stanley posits that the advancement of e-commerce and the growing reliance on third-party logistics providers will favor companies like Shadowfax and Delhivery.
Shadowfax’s share of the e-commerce shipment market has escalated from 8% in FY22 to an estimated 28-30% by FY26, with the expectation that its third-party logistics (3PL) market share will reach around 34% by FY29 under its baseline scenario.
The brokerage anticipates Shadowfax will achieve a remarkable compound annual growth rate (CAGR) of 28% in revenue from FY26 to FY29, notably exceeding Delhivery’s anticipated 18% growth rate. Both companies are expected to derive the majority of their revenue from express parcel services.
Lastly, Morgan Stanley emphasizes that augmented user engagement and effective monetization strategies are crucial for e-commerce platforms.
In the case of Meesho, projections indicate that the average number of orders per active buyer will increase to approximately 16 by FY29, underpinned by enhanced logistics efficiencies and rising advertising revenues supporting contribution margins.
Source link: Aninews.in.
