Swiggy Shares Hit Record Low After Quick-Commerce Losses Widened

Shares of food delivery and quick-commerce firm Swiggy declined sharply on Friday, falling to a record low in early trade. The stock dropped 6.20 per cent to 198.30 rupees, putting it on track for its worst trading day on record if the downward trend continues.

The sell-off followed the company's financial report, which showed wider losses in its quick-commerce business, Instamart. The results brought renewed investor attention to the high costs of profitability within the intensely competitive quick-commerce segment, closely following financial results from rival Eternal earlier in the week.

Both Swiggy and Eternal have been aggressively scaling up their networks of small local warehouses, known as dark stores. While this expansion has served as a primary growth driver for both companies, the heavy capital expenditure required for growth has kept profitability under scrutiny.

During the second quarter, Instamart reported an adjusted core loss that widened to 895 crore rupees, compared to 849 crore rupees during the same period a year earlier.

Market analysts and brokerages have responded to the numbers with adjusted valuations. Brokerage firm Jefferies noted that Instamart's ongoing losses remain a primary concern for investors, though it added that the current market price does not fully capture the underlying value of Swiggy's core food-delivery business and its cash reserves. Jefferies kept its 'buy' rating on the stock but lowered its target price from 435 rupees to 330 rupees.

Meanwhile, Emkay pointed out that consistent double-digit sequential net order value growth for Instamart, alongside better customer retention, store utilisation, and monetisation, could support a higher valuation for the company in the future. Emkay described Swiggy as a resilient food delivery franchise with operational leverage, viewing the quick-commerce division as an optional growth vector. Emkay also maintained its 'buy' rating on the stock while reducing its price target by 11 per cent to 310 rupees.

"The recent drop in Swiggy's share price highlights the capital-intensive nature of the quick-commerce sector. While rapid dark store expansion is essential for capturing market share, the widening core losses in units like Instamart demonstrate that scaling logistics comes at a heavy short-term cost. Investors are currently weighing high-growth potential against near-term profitability. Moving forward, balancing aggressive geographic expansion with unit-level economics and operational efficiency will be the defining challenge for quick-commerce operators in India." — Dr. Shishir Gupta, Founder & CEO, StartupLanes