Mumbai, NFAPost: India’s leading food delivery and quick commerce platform Swiggy witnessed a massive 15% decline in its shares to a fresh low on Friday following the September quarter results (Q2), which prompted analysts to trim their earnings expectations and target prices on expectations of an extended path to profitability.
Swiggy shares slumped below the ₹200 mark on Friday as they hit a fresh low of ₹180.30 on the BSE, down 14.6% against the last close of ₹211.30 apiece. Friday marks the fourth straight session of decline for the new-age stock, during which it has lost 22%. From its offer price of ₹390 apiece, the stock has more than halved.
While Swiggy reported a consolidated net loss of ₹922 crore for the September quarter of FY27, narrowing from ₹1,092 crore a year earlier, analysts said it was wider than expectations. Analysts at Motilal Oswal Financial Services (MOFSL) expected a loss of ₹850 crore.
Meanwhile, the earnings before interest, tax, depreciation and amortisation (Ebitda) loss came in at ₹770 crore, and was ~41% wider than Nirmal Bang’s estimate of ₹547 crore, and 33% below consensus, as Instamart stepped up growth investment and losses from Platform Innovations increased.
Consolidated revenue stood at ₹7,571 crore, up 36% year-on-year (YoY) and 2.8% above consensus.
The food delivery (FD) business’s gross order value (GOV) grew 17.7% YoY, whereas the contribution margin (CM) expanded 10bp QoQ to 7.7%. Instamart’s GOV was ₹9230 crore (up 31.4% YoY) vs MOFSL’s estimate of ₹9050 crore. Instamart reported a contribution margin of -1.0%, though management expects a 100 bps Q3FY27 recovery with an additional ~80bp expansion from the inventory model transition in subsequent quarters.
Analysts said that Swiggy is growing slower than Eternal now on both food delivery and quick commerce. Meanwhile, lower quick commerce growth assumption extend path to profitability. According to global investment bank Jefferies, a reduction in quick commerce losses is essential for true value discovery.
Leave a Reply