Swiggy shares crash 7% as Q3 loss widens, brokerages see tough quarter ahead

Swiggy's stock has struggled post-listing, remaining flat against its debut price

Shares of Swiggy crashed over 7 percent to Rs 387 apiece on February 6 as brokerages offered mixed views on the counter after net loss widened to Rs 800 crore in Q3FY25 from Rs 524 crore a year ago. Rising competitive intensity and aggressive dark store expansion continue to weigh on margins and analysts expect these challenges to persist in the next quarter.

UBS maintained a "buy" rating on Swiggy with a target price of Rs 515, while Macquarie reiterated its "underperform" call, setting a lower target of Rs 325.

Swiggy's stock has struggled post-listing, remaining flat against its debut price of Rs 412 per share. While it initially surged to an all-time high of Rs 617 on December 23, 2024, the stock has tumbled nearly 40 percent.

ALSO READ: Swiggy Q3 results: Net loss widens 39% to Rs 799 crore

UBS warned that margin pressure is likely to persist for the foreseeable future, with no immediate upgrades planned for dark store expansion—unlike Zomato. Swiggy had already added 90 dark stores in January alone, almost matching its Q3FY25 expansion pace.

Macquarie echoed concerns over swelling losses in the quick commerce segment, attributing margin declines to network expansion and intense competition. "The hyper-competitive phase is expected to last a few more quarters. At this stage, we prefer Zomato over Swiggy," the firm noted.

Nuvama also flagged Swiggy’s dark store expansion as a key headwind for the March quarter. Heavy investments in Instamart, its quick commerce arm, have further strained margins amid fierce rivalry with Blinkit and Zepto. The contribution margin for the segment dipped to -4.6 percent in Q3 FY25 from -1.9 percent in the preceding quarter.

On the food delivery front, Swiggy reported a 19.2 percent YoY rise in gross order value (GOV) to Rs 7,436 crore, fueled by a growing transacting user base and increased order frequency. Meanwhile, Instamart’s annualised gross sales run-rate hit $1.8 billion, trailing Blinkit’s $3.7 billion and Zepto’s $3 billion.