Swiggy shares tank 4% after weak Q1; should you buy, sell, or hold?

Swiggy shares have been on a weak run, slipping over 25 percent since the beginning of the year.

Shares of Swiggy fell as much as 4 percent to Rs 386 in morning trade on August 1 after it reported that its net loss widened almost 96 percent year-on-year (YoY) to Rs 1,197 crore in the first quarter (Q1) of financial year 2025-26 (FY26), up from Rs 611 crore in the same period a year ago.

Swiggy’s revenue from operations rose 54 percent YoY to Rs 4,961 crore in Q1, up from Rs 3,222 crore a year ago. It had reported a revenue of Rs 4,410 crore in the previous quarter.

Follow our LIVE blog for all the latest market updates

The drop comes despite two foreign brokerages issuing bullish calls on the stock, citing positive growth levels.

Jefferies has upgraded Swiggy to a Buy with a target price of Rs 500 per share. The brokerage highlighted strong growth in the food delivery business during Q1 and noted continued momentum in quick commerce (Q-commerce). However, EBITDA margin declined quarter-on-quarter, primarily due to higher rider and staff costs. Despite this, management views Q1 as the trough for profitability, indicating improvement ahead.

Morgan Stanley has maintained an "Overweight" rating on Swiggy, with a target price of Rs 450 per share. The brokerage said the food delivery segment is performing in line with expectations. It has also raised its profitability assumptions for the Q-commerce business and lowered loss projections based on positive commentary from the company on Q2 performance.

Also read: India Inc Q1 earnings disappoint: Slowest profit growth in 8 quarters, revenue falls sharply

Revenue for Swiggy's quick commerce business, Instamart, more than doubled to Rs 806 crore on an annual basis. GOV growth accelerated to 107.6 percent YoY and 21.1 percent QoQ to Rs 5,655 crore, with 1.2 million MTUs added.

“Q1 is a seasonal low for availability of delivery partners given reverse-migration and beginning of rains, and hence incremental investments into their availability are made every year by Food delivery platforms. Bunched with our regular annual appraisal cycle in Q1, this has kept our Adjusted EBITDA margin at 2.4 percent (vs 2.9 percent in Q4); a seasonal impact which will normalise as the year progresses,” Swiggy Group CEO and MD Sriharsha Majety, talking about the company’s food delivery business.

At about 9:30 am, shares of the company were trading at Rs 387, lower by 4.1 percent from the last close on the NSE. Swiggy shares have been on a weak run, slipping over 25 percent since the beginning of the year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.