India's Swiggy falls to record low as quick-commerce losses widen (updated)

Swiggy

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By Saikeerthi .
Oct 23 (Reuters) - Shares of Swiggy SWIG.NS, an Indian online food delivery and quick-commerce firm, fell to a record low on Friday after wider losses in its quick-commerce business renewed concerns over cash burn and the company's path to profitability.
Shares were down roughly 15% at 179.90 rupees, as of 12:50 p.m. IST, and are on track for a record worst session, if the current losses hold. Swiggy's stock has lost more than half its value since market debut on November 13, 2024.
Swiggy, Amazon, Flipkart and Zomato parent Eternal ETEA.NS have poured billions of dollars into India's quick-commerce market, where players such as Elternal's Blinkit, Zepto and Swiggy's Instamart are competing to deliver groceries and other essentials within minutes.
    "The market is basically saying Swiggy is burning cash, but still not growing at the expected pace and which is not even at the pace of competitors," said Akshay D'Souza, an independent consumer consultant. 
Instamart added 69 net dark stores in the September quarter, taking its total to 1,240, while rival Blinkit added 308 to reach 2,751. 
The race to add dark stores and capture market share has driven up costs, putting pressure on margins and sharpening investor focus on whether Swiggy and rival Eternal can improve unit economics without sacrificing growth.

     
         
Eternal's Blinkit reported an adjusted core profit of 1.84 billion rupees ($19.38 million) on Wednesday, a turnaround from a loss of 1.56 billion rupees in the year-ago period. 
Meanwhile, Instamart's adjusted core loss widened to 8.95 billion rupees in the second quarter from 8.49 billion rupees a year earlier.
Swiggy said it would now focus on deepening Instamart's presence in existing markets rather than expanding into new ones, signalling a more measured approach after aggressive expansion.
Instamart's losses remain a key investor concern, Jefferies said, adding that Swiggy's current share price does not fully reflect the value of its food-delivery business and cash holdings.
The brokerage maintained its "buy" rating but cut the target price to 330 rupees from 435 rupees.
    
    ($1 = 94.9475 Indian rupees)

 (Reporting by Saikeerthi in Bengaluru; Editing by Chandini Monnappa and Sherry Jacob-Phillips)
 ((Saikeerthi@thomsonreuters.com; (+91) 8296756080))