Swiggy shares fall 15% in two days; is everything alright with the foodtech major?

Food delivery major Swiggy's shares remained under selling pressure for the second straight session on Thursday, with the foodtech stock falling over 15% in two days. So, the big question is whether food delivery business or quick commerce segment is to be blamed for slump in share price, which briefly slipped below its IPO price of ₹390 in early trade today.

After ending 5.4% lower on Wednesday, Swiggy share price declined further by 7.4% to hit its lowest level of ₹387 in opening deals. However, the newly listed stock soon regained some ground and was trading 3.5% lower at ₹403.25, at the time of reporting. The market capitalisation of the Bangalore-based company stood at ₹91,321 crore. In comparison, its closed rival Zomato was trading flat with marginal gains at ₹233 per share.

In the calendar year 2025, Swiggy has lost 26% market value, while the stock has fallen as much as 37% from its record high level of ₹617 touched on December 23, 2024. The Softbank-backed company made its market debut on November 13 after raising ₹11,327.43 crore via IPO route, which was oversubscribed more than three times. 

What's causing fall in Swiggy shares?

Swiggy shares were hammered today after its consolidated net loss widened by 39% to ₹799 crore in the third quarter ended December 31, 2024. The losses were higher than consensus estimate of ₹620 crore as margins were affected due to heightened competitive intensity in the quick commerce and food delivery space along with dark store expansion. The challenging macros also weighed on the food delivery business, and management believes growth could slow down for the industry as a whole despite the recent consumption push.

For Q3 FY25, Swiggy delivered revenue of ₹3,993 crore, up 31% compared to ₹3,048.7 crore in the same quarter of previous year. On the operating front, EBITDA loss was ₹730 crore (from ₹550 crore in Q2 FY25), while margin stood at -18.2% (down 279 basis points QoQ and 94 bps YoY).

Segment-wise, food delivery business reported gain in market shares, with its gross order value (GOV) growing 19.2% YoY, whereas the contribution margin improved to 7.4% in Q3 FY25. On the other hand, Instamart overall was a miss on both GOV and margins fronts. Instamart’s GOV was up 15.5% QoQ, albeit lower than Street estimates, while contribution margin dipped 270bp QoQ to -4.6% during the quarter under review.

Analysts view on Swiggy Q3 results

Motilal Oswal has reiterated its ‘Neutral’ rating on the stock with a lower target price of ₹460 per share, from ₹520 earlier. For Q4 FY25, the brokerage expects revenue and adjusted EBITDA loss to increase 7.0% and 14.5% QoQ, respectively.

“We believe food delivery remains a stable duopoly; however, increased competition and aggressive dark store expansion have rebased profitability expectations for the quick commerce sector in the near term,” it says in a note.

Meanwhile, ICICI Securities has maintained ‘BUY’ on the stock with a target price of ₹740, saying that slowdown in discretionary spending and negative externalities disrupting business operations.

Nuvama in a report says that Swiggy’s contribution margin decline was partially due to dark store additions, though the magnitude of the miss suggests margins of existing stores also posted a compression. “Dark store expansion accelerated in the second half of the quarter and picked up further in January, creating a headwind for Q4.”

Despite near-term pressures, Swiggy’s management has reaffirmed its annual growth guidance of 18-22% and 5% adjusted EBITDA margin in medium term for food delivery business. For quick commerce, the management maintained its guidance for contribution breakeven by Q3 FY26. The company is focusing on store additions to drive category growth in the medium term.

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