Swiggy's shares dropped to a 52-week low following its Q2 results that showed a Rs 922 crore loss and a widening adjusted EBITDA deficit, raising investor concerns about profitability and quick commerce growth.
- Q2 net loss of Rs 922 crore despite 36% revenue growth
- Adjusted EBITDA loss widens, with quick commerce segment under pressure
- Major brokers cut target prices citing profit challenges and competition
What happened
Swiggy reported a net loss of Rs 922 crore in the second quarter, significantly larger sequentially than the Rs 792 crore loss recorded in the previous quarter. While revenue from operations rose 36% year-over-year to Rs 7,571 crore, the company’s adjusted EBITDA loss increased to Rs 760 crore from Rs 695 crore a year earlier. The quick commerce business, Instamart, saw gross order value grow by 31% YoY to Rs 9,230 crore.
Following the results announcement, shares of Swiggy tumbled 13.8% to a 52-week low on the BSE. Analysts from Jefferies, Nomura, Bernstein, Motilal Oswal, and Elara Capital revised their target prices downward, reflecting concerns about Swiggy’s ability to reduce its losses, especially in the quick commerce segment, and challenges in matching growth and margin improvement compared to competitors.
Why it matters
The widening losses and growing EBITDA deficit underline the uphill battle Swiggy faces in balancing growth with profitability. While the increase in revenue and the expansion of Instamart’s gross order value demonstrate underlying market demand, investor confidence is shaken by the company's inability so far to significantly cut losses or chart a clear path to profitability in its quick commerce operations.
Analysts emphasize that the food delivery segment, which remains the core revenue generator, is still viewed as having intrinsic value, but the quick commerce business requires more effective cost control and margin management. The competitive landscape, notably with peers like Zomato and Blinkit, adds further pressure, with investors awaiting more decisive operational improvements and sustainable margin expansion.
What to watch next
Market participants will closely monitor Swiggy’s efforts to improve profitability in Instamart, as analysts highlight the need for a clear, credible plan to deliver EBITDA break-even or better in quick commerce. Any strategic initiatives or operational efficiencies aimed at reducing losses could drive renewed investor interest and potentially stabilize the shares.
Additionally, Swiggy’s performance in food delivery margins and gross order value growth will be key indicators of overall business health. Investors will also watch how competitive dynamics evolve, including responses to pricing pressure and the company’s ability to balance growth with cash flow generation. Future quarterly results and analyst revisions will further influence market sentiment and share valuation.