Swiggy shares plunged 15% after widening Instamart losses and weaker growth than rival Eternal intensified doubts over the quick-commerce business’s route to profitability.
Swiggy shares tumbled on Friday as investors turned sharply against the company’s heavy spending on quick commerce, with losses at Instamart once again eclipsing steadier progress in its food delivery business. The stock fell 15% to ₹179.65 on the BSE, wiping out about ₹9,000 crore in market value in a single session.
The latest slide came after several brokerages cut their target prices following Swiggy’s second-quarter update. JM Financial kept its “Reduce” call and lowered its target to ₹200 from ₹255, while Nuvama cut its estimate to ₹200 from ₹255. Nomura retained a Buy rating but reduced its target to ₹300 from ₹435, and Emkay Global trimmed its price objective to ₹310 from ₹350.
The main concern was Instamart, where growth came at a steep cost. Net order value increased 13.4% from the previous quarter, but the contribution margin slipped further into negative territory, reaching minus 1.4% from minus 0.3%. Adjusted EBITDA losses widened to ₹895 crore from ₹778 crore, prompting fresh doubts over when, or whether, the business can become profitable.
Swiggy has argued that the worst of the losses may already be behind it, saying Instamart’s deficit peaked in the quarter and that the operation could break even at about 2.3 times its current scale. That would imply annualised net order value of roughly ₹6,000 crore, compared with about ₹2,600 crore now, and would also require a contribution of ₹30 per order. Still, analysts said the path to that point remains uncertain.
The growth spurt itself has been expensive. Swiggy added 69 dark stores during the quarter, taking the total to 1,240, while orders per store rose to 1,192 from 1,089. Even so, analysts have suggested the improvement owes much to aggressive investment rather than durable operating leverage. JM Financial said the quarter showed “Losses delivered instantly” and questioned whether the company has a convincing route to profitability in the near term.
Investor unease is also being fed by Swiggy’s smaller ventures. Losses in Platform Innovations, which includes Toing, rose to ₹162 crore from ₹131 crore. JM Financial said there was “zero rationale” for keeping Toing separate, arguing that it overlaps with the company’s existing restaurant, delivery and customer network. It warned of cannibalisation, higher cash burn and limited evidence of value creation, and urged Swiggy to shut the initiative and concentrate resources on its core business.
That core business remains the stronger part of the group. Food delivery gross order value rose 17.7% year-on-year to ₹10,054 crore, while adjusted EBITDA increased 42% to ₹341 crore. The margin improved to 3.4% from 2.8% a year earlier. Nomura described the division as a “cash cow” and expects it to generate between ₹1,300 crore and ₹1,900 crore of EBITDA in both FY27 and FY28.
Even so, Swiggy is still lagging its main rival. Eternal’s food delivery business grew 21.5%, ahead of Swiggy’s 17.7%, while its quick-commerce order value rose 22.2% sequentially, faster than Swiggy’s 13.4%. That gap has sharpened a broader question for the market: whether Swiggy is giving up ground in its most reliable business while spending heavily to catch up in a segment that is still struggling to prove its economics. Emkay said it would need to see sustained double-digit sequential growth, better retention, stronger monetisation and higher store utilisation before assigning more value to the quick-commerce arm.
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