EconomyMarkets
Swiggy shares sink to a record low as investors balk at Instamart losses
The food and grocery delivery company fell about 10% in early trade on Friday, a day after September-quarter results that analysts said pushed profitability further away. A narrower loss and 36% revenue growth were not enough.
Key points
- Swiggy fell about 10% to a fresh low of ₹190.85 on the BSE, its fourth straight fall.
- The quarterly net loss narrowed to ₹922 crore from ₹1,092 crore a year earlier.
- Instamart lost ₹895 crore in the quarter even as its order value grew 31.4%.
Swiggy’s shares fell to a record low on Friday morning as investors gave a cold reception to the company’s September-quarter results. The stock dropped about 10% to ₹190.85 on the BSE soon after the open, 9.6% below Thursday’s close of ₹211.30.
It was the fourth straight session of losses, taking the fall over that stretch to about 18%. Analysts trimmed their earnings forecasts and target prices after the results, pointing to what they described as an extended path to profitability.
What the numbers showed
On paper the quarter was not a bad one. Swiggy’s net loss narrowed to ₹922 crore from ₹1,092 crore a year earlier, and revenue from operations rose 36.1% to ₹7,571 crore. Total expenses, however, climbed to ₹8,703 crore from ₹6,711 crore.
Food delivery is now making steady money. Gross order value in the business rose 17.7% to ₹10,054 crore and adjusted Ebitda reached ₹341 crore, or 3.4% of order value. Managing director and group chief executive Sriharsha Majety said the unit “delivered its highest-ever profits and margins”.
The worry is Instamart, the quick-commerce arm that competes with Blinkit and Zepto. Its net order value grew 31.4% to ₹6,954 crore and the network grew by 69 dark stores to 1,240, but the business lost ₹895 crore. Its contribution margin, at minus 1% of order value, improved from a year ago but slipped from the previous quarter.
Mr Majety said quick commerce “delivered accelerated growth as guided” and that Swiggy had obtained approvals to qualify as an Indian-owned and controlled company. In a crowded market, he said, speed and selection have become “table stakes” and differentiation will decide the winners.
The sell-off came on a weak day for consumer and smaller stocks across Dalal Street, with the Nifty Midcap and Smallcap indices sliding sharply through the session.