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Swiggy’s shares fell 7.4% to a new 52-week low of Rs 385.25 on the BSE on Thursday following Q3 earnings; Should you buy, sell or hold?
Swiggy Shares Fall
Swiggy Share Price: Swiggy’s shares fell 7.4% to a new 52-week low of Rs 385.25 on the BSE on Thursday, February 6, following the company’s report of a consolidated loss of Rs 799 crore for the December quarter. This marks a larger loss compared to Rs 574 crore during the same period last year.
Swiggy’s revenue from operations for Q3FY25 reached Rs 3,993 crore, reflecting a 31% increase from Rs 3,049 crore in the same quarter of the previous year.
The company’s losses also widened both year-on-year and sequentially, as it posted a consolidated loss of Rs 799 crore in Q3FY25, compared to a loss of Rs 574 crore in Q3FY24. Sequentially, the loss also grew from Rs 626 crore in Q2FY25, although the topline showed an 11% growth from Rs 3,601 crore in the July-September quarter of FY25.
The increase in losses was largely driven by a 32% year-on-year rise in expenses for Q3FY25, which totaled Rs 4,898 crore, up from Rs 3,700 crore in the same period last year. In Q2FY25, the company’s expenses were Rs 4,309 crore.
Should you buy, sell, or hold Swiggy’s stock? Here’s what analysts say:
Macquarie has maintained an ‘Underperform’ rating on Swiggy, with a target price of Rs 325. The brokerage highlighted that the economics of Q-commerce remain challenging, with the segment posting a wider-than-expected net loss. It also noted that network expansion and increased competition have pressured margins. Macquarie expects this hyper-competitive phase to persist for a few more quarters. However, the food delivery business is expected to eventually reach its margin targets. Macquarie prefers Zomato over Swiggy.
Nuvama observed that Swiggy’s food delivery segment remains stable, though competitive pressures are impacting margins. Instamart’s adjusted EBITDA margin fell by 420bps QoQ, while its contribution margin dropped by 270bps. This decline is partly due to the addition of dark stores, with further expansion of these stores expected to create challenges in Q4.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
