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Swiggy’s shares plunged 11% in Tuesday’s trade (January 21), hitting an 8-week low of Rs 427 per share
Swiggy Share Price
Swiggy’s shares plunged 11% in Tuesday’s trade (January 21), hitting an 8-week low of Rs 427 per share, following the release of weak earnings by its competitor, Zomato, for the December-ending quarter. This raised concerns among investors, further impacting Swiggy’s stock performance.
Zomato’s shares also saw an 11% drop to Rs 214 on the BSE, with target prices falling sharply to Rs 130 from global brokerage firms like Macquarie. Nomura reduced its target from Rs 320 to Rs 290, Jefferies cut it from Rs 275 to Rs 255, Nuvama lowered it from Rs 325 to Rs 300, and Kotak Equities revised it from Rs 305 to Rs 275.
Zomato’s food delivery Gross Order Value (GOV) growth came in at 17% year-on-year, missing estimates by 1.8%. The company also highlighted a broad-based slowdown in demand starting in the second half of November, which weighed on Swiggy’s stock as well. Swiggy has already lost about 25% of its value from its peak.
Tuesday’s drop marked the biggest intraday fall for Swiggy since its listing in November last year. The stock is now trading near its listing price of Rs 420, remaining 11% above its issue price of Rs 390.
Swiggy vs Zomato
ICICI Securities noted that Swiggy has performed well with initiatives like “Swiggy BOLT,” a 10-minute food delivery service, and “Swiggy BLCK,” a premium loyalty offering. The company reports that Bolt now accounts for ~9% of Swiggy’s food delivery GOV, although much of this is replacement demand rather than new demand. ICICI sees potential market share gains for Swiggy in the near term, noting that Swiggy is trading at a more reasonable valuation compared to Zomato (15-25% discount on EV/EBITDA and EV/Sales). The brokerage initiated coverage on Swiggy with a BUY rating and a target price of Rs 740.
Technical View
An analyst advised against buying Swiggy at current levels due to the prevailing market weakness and lack of bullish signals. “Swiggy remains in a no-trade zone for now. Investors are urged to avoid initiating fresh positions and should wait for clearer signs of a trend reversal,” said Ameya Ranadive, Chartered Market Technician and Senior Technical Analyst at StoxBox.
