Swiggy shares tank 38 pc this year amid mounting losses, slowing growth

IANS April 15, 2025 245 views

Food delivery giant Swiggy is experiencing significant financial challenges in 2024, with its stock price plummeting 38% this year. The company is struggling with mounting losses, intense market competition, and a struggling quick commerce segment. Bank of America recently downgraded Swiggy's rating, highlighting concerns about profitability and growth. Despite a 10.9% quarterly revenue increase, the company's Q3 net loss grew by 39%, signaling potential long-term sustainability issues.

"This increased competition could lead to higher marketing expenses, greater platform discounts, and a drop in delivery charges" - Bank of America
Swiggy shares tank 38 pc this year amid mounting losses, slowing growth
Mumbai, April 15: Swiggy's share price has taken a sharp hit this year by plunging 38.32 per cent year-to-date (YTD) on the National Stock Exchange (NSE), as investor sentiment weakens over the company's rising losses and margin pressures.

Key Points

1

Swiggy stock plunges 38% amid rising losses and competitive challenges

2

BofA downgrades rating citing slow growth in food delivery

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Q3 net loss jumps 39% to Rs 799 crore

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Quick commerce segment continues to strain profitability

The stock, which closed flat at Rs 334.5 on Tuesday, has been under sustained pressure amid growing concerns about its quick commerce business and slowing growth in the food delivery segment.

Over the past six months, the stock has fallen 26.64 per cent, while the last one-month data shows a decline of 6.05 per cent on the NSE.

Even though Swiggy saw a minor recovery of 4.29 per cent in the past five days, the broader trend remains negative as analysts warn of persistent challenges ahead.

Bank of America (BofA) last month downgraded Swiggy’s rating to 'underperform', slashing its target price from Rs 420 to Rs 325.

The brokerage cited slowing growth in the food delivery segment and intensifying competition in the quick commerce space as major risks.

BofA also pointed out that rising competition from new entrants offering deep discounts, coupled with higher marketing expenses, will likely impact Swiggy's profitability in the near term.

“This increased competition could lead to higher marketing expenses, greater platform discounts, and a drop in delivery charges for consumers,” the brokerage said on March 26.

The bigger concern, analysts say, is that profits from food delivery -- once a stable source -- are now being redirected to cover losses in quick commerce, a business that remains far from breakeven.

Adding to the gloom, the company reported a Rs 799 crore net loss in Q3 FY25 -- a 39 per cent jump from the year-ago period.

Sequentially too, losses grew sharply compared to the previous quarter. Swiggy’s operating loss (EBITDA before interest, tax, depreciation, and amortisation) rose to Rs 725.66 crore.

However, revenue from operations grew 10.9 per cent quarter-on-quarter (QoQ) to Rs 3,993 crore, thanks to higher contributions from Instamart.

The food delivery platform is set to announce its Q4 FY25 results soon.

Reader Comments

R
Rahul K.
Not surprised at all. Their delivery fees keep changing and service quality has gone down while prices went up. Used to order daily, now maybe twice a month. 🤷‍♂️
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Priya M.
This is what happens when companies focus too much on expansion without fixing core issues. Their app still crashes randomly after all these years!
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Amit S.
As an investor, I think this might be a buying opportunity. Food delivery is still essential and they have strong brand recall. The quick commerce gamble might pay off long-term.
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Neha T.
Their Instamart service is actually pretty good - fast delivery and decent prices. Maybe they should focus more on that instead of trying to do everything at once.
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Sanjay R.
Respectful criticism: Swiggy's problem is trying to copy Zomato's playbook instead of innovating. They need to find their own niche rather than following competitors into every new segment.
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Kavita P.
Used to love Swiggy but now I find myself checking multiple apps before ordering. The discounts aren't as good as they used to be and delivery times are inconsistent. Hope they turn it around!

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Tags:
Swiggy Food Delivery Stock Market Quick Commerce Startup Challenges BofA Instamart
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