The shares of food delivery and quick commerce majors Swiggy and Zomato extended losses on February 11 as they continued to reel under the effect of their weak performance in the October-December quarter of the current financial year.
Swiggy shares crashed over 6 percent to trade at Rs 340.4 apiece, while those of Zomato were trading nearly 5 percent lower at Rs 216.40 apiece, as seen at 11.44 am.
Swiggy
Swiggy shares have now recorded losses for the fifth consecutive session. The company on February 5 had reported a net loss of Rs 799 crore for the quarter ended December 31, 2024. This marks a further widening of net loss from the Rs 574-crore loss reported in the year-ago period.
The stock has fallen nearly 26 percent since its Q3 results. Swiggy shares are currently way below the listing price. The stock had listed with a 7.69 percent premium at Rs 420 per share on the National Stock Exchange (NSE) on November 13. On BSE, the shares were listed at Rs 412 per share, marking a premium of 5.6 percent over the IPO price of Rs 390. It has now fallen 19 percent from its debut price.
Motilal Oswal has maintained its 'Neutral' rating on the stock. It has reduced its target price to Rs 460 apiece, from the earlier target price of Rs 520 apiece. The latest estimate however implies an upside potential of 35 percent from the current level.
Another overhang for the stock is the anchor lock in for the stock coming to an end. Swiggy's Instamart quick-delivery platform contributed less to earnings as it poured money into expanding so-called dark stores, offered bigger discounts and hired more personnel during the seasonally-strong quarter.
Zomato
Zomato shares have also seen a significant downfall in the past few weeks. After hitting an all-time high record of Rs 304 in December, the stock has now fallen nearly 29 percent to current levels.
The fall in stock price was fueled on February 11 by large block deals that took place on exchanges. The stock has seen a consistent downfall since January 20, when the company reported a 57 percent year-on-year (YoY) decline in quarterly net profit at Rs 59 crore for the third quarter of the current financial year.
The recent fall in Zomato’s share price was further accentuated after global brokerage firm Jefferies downgraded the stock to a 'hold' call last month, citing the sharp run-up in the stock through 2024 and concerns over rising competition in the quick commerce space.
The fall in the stock prices comes amid a broader market downturn. At 1:30 pm, Sensex was down 1,102.78 points or 1.43 percent at 76,209.02, and the Nifty was down 340.5 points or 1.46 percent at 23,041.10.
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