Posted on March 27, 2025, by Niftynews
Swiggy Stock Price Takes a Hit Amid Weak Operational Performance
Swiggy share price fell sharply on March 27, 2025, hitting a new low of ₹314.35, a 3% drop in early trade on the BSE. This marks a significant decline of 49% from its 52-week high of ₹617.30, which was reached on December 23, 2024. The drop comes amid rising concerns about the company’s quick commerce business and slowdown in the food delivery unit, pushing Swiggy stock price even lower.
Why Swiggy Share Price is Under Pressure
Since February 5, 2025, Swiggy stock price has been under pressure, falling 28% after the company reported weak operational performance for the December 2024 (Q3FY25) quarter. During this period, Swiggy reported a consolidated net loss of ₹799 crore, up from ₹574.3 crore during the same quarter in the previous year. The company’s losses have continued to widen sequentially, increasing from ₹625.5 crore in the previous quarter.
Despite this, the company’s revenue from operations grew by 31% year-on-year (YoY) to ₹3,993 crore, indicating a solid demand for its core business. Swiggy’s gross order value (GOV) also rose 38% YoY, reflecting the growth potential of the food delivery segment.
Quick Commerce Business Dragging Swiggy Stock Price
A significant factor contributing to the ongoing Swiggy share price decline is the increased cash burn in the quick commerce business. The quick commerce sector has seen growing competitive intensity, putting pressure on valuations, as highlighted by analysts at ICICI Securities. Analysts have warned that the lack of immediate improvement in contribution margins for quick commerce businesses, combined with the sector’s high cash burn, is making investors wary, further depressing Swiggy stock price.
Despite concerns about quick commerce, food delivery remains a more stable sector, with Swiggy continuing to scale its business profitably. While growth in the food delivery sector slowed down in Q3FY25, analysts do not expect any structural issues. However, rising competition in the food delivery market, as well as challenges posed by macroeconomic factors, are causing headwinds for the company.
Market Outlook and Investor Sentiment
According to Bank of America (BofA) Securities, the brokerage downgraded Swiggy stock to “Underperform” from “Buy”, citing profitability concerns and weaker-than-expected operational performance. Swiggy faces increased risks due to the challenges in the quick commerce sector and intense competition in the food delivery business.
Despite these challenges, Swiggy stock price remains 19% below its issue price of ₹390 per share, following its market debut on November 13, 2024. This decline raises concerns about the future trajectory of the company’s stock and whether investors will regain confidence in its long-term prospects.
What Should Investors Do with Swiggy Share Price?
Given the ongoing decline in Swiggy stock price, investors are advised to carefully assess the situation before making any decisions. Here are some points to consider:
- Monitor Quick Commerce Trends: Swiggy’s quick commerce business has been a major source of concern. Investors should keep an eye on the future direction of this segment and whether Swiggy can find a path to profitability.
- Evaluate Long-Term Growth in Food Delivery: Swiggy’s food delivery business continues to scale profitably, even with a slowdown in growth in the most recent quarter. Investors should consider whether the food delivery market can provide stability in the face of competition and challenging macroeconomic conditions.
- Consider Valuation: Given that Swiggy stock price is significantly below its issue price, some investors may view the current levels as an attractive entry point, particularly if they have a longer-term investment horizon.
- Stay Informed on Industry Trends: Food delivery and quick commerce are highly competitive sectors. Swiggy’s stock price will likely be influenced by trends in both sectors, so staying informed about industry developments will be crucial for any decision-making.
Conclusion: Navigating the Volatility of Swiggy Stock Price
Swiggy share price has faced significant volatility in recent months, dropping 49% from its December 2024 high. The company’s widening losses and pressures in the quick commerce business are weighing heavily on its stock. While there is strong demand in its core food delivery business, the Swiggy stock price may remain volatile in the near term as investors digest the challenges ahead.
Investors should keep a close watch on how Swiggy adapts to these challenges and whether the company can return to a profitable growth trajectory in the coming quarters.
