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A man walks near a logo of Swiggy ahead of its Initial Public Offering (IPO) listing ceremony at the National Stock Exchange (NSE) in Mumbai.
| Photo Credit: REUTERS
Shares of Swiggy plunged about 8% a record low on Thursday (February 6, 2025), after the company reported a wider third-quarter loss hurt by increased expansion costs to counter rivals Zomato and Zepto.
Companies like Swiggy and Zomato are intensifying their focus on quick commerce, which aims to deliver a variety of products in less than 10 minutes, by opening more warehouses or so-called “dark stores” to fulfil such orders.
Shares of the company were last trading about 4% lower at ₹401.65, and were set for a seventh straight week of decline.
Swiggy, which operates quick commerce platform Instamart, reported a 32% surge in expenses on Wednesday (February 5, 2025) as it launched 96 new dark stores during the quarter, almost twice the number from the previous quarter.
It added 86 more such stores in January, which analysts at Nuvama said will create headwinds for the firm in the ongoing quarter.
Elara Capital analysts said Instamart’s contribution margin during the December quarter was more impacted than its rival Zomato, which is also facing the same struggle.
Swiggy’s contribution margin in quick commerce sequentially contracted by 270 basis points to 4.6% in the third quarter.
They said the impact was also due to Instamart’s strategy of expanding into new regions, rather than strengthening its existing operational network.
At least five brokerages lowered price targets on the stock after the results, as per LSEG data. The mean price target on stock fallen to ₹553.29 from ₹578.45 before the results.
Swiggy reported a consolidated net loss for the third quarter ended December 31 widened to ₹799 crore from a net loss of ₹574 crore a year ago.
Published – February 06, 2025 11:45 am IST
