Swiggy shares plunged nearly 12% on October 23, hitting a record low as investors grew concerned about mounting losses at its quick-commerce business, Instamart, and the rising costs of competing in India's crowded instant-delivery market.
The stock fell to an intraday low of ₹184.90, down 12.49% from its previous close of ₹211.30. At the time of the reported market snapshot, shares were trading at ₹186.15, down 11.90%.
The decline reflects sustained pressure on the stock. As of 9:50 am on October 23, Swiggy shares had fallen 19.51% over five trading sessions, 33.27% over one month and 36.58% over six months. The stock was down 52.43% year to date, with its price reported at ₹185.85.
1. Instamart Losses Widen to ₹895 Crore
The biggest concern for investors is the widening loss at Instamart. The quick-commerce business reported an adjusted core loss of ₹895 crore in the September quarter, compared with ₹849 crore a year earlier.
Quick-commerce companies are expanding their networks of small warehouses, known as dark stores, to deliver groceries and other essentials within minutes. However, building infrastructure, fulfilling orders and attracting customers can increase costs and delay profitability.
Investors are now looking for evidence that rising order volumes and sales can translate into stronger unit economics. Continued losses have raised questions about how much additional investment Instamart may require before achieving sustainable profitability.
2. Intense Competition Keeps Margins Under Pressure
Swiggy and rival Eternal are expanding their dark-store networks as instant delivery becomes an increasingly important growth segment. However, aggressive expansion and competition are keeping operating costs and margins under scrutiny.
Investors are assessing whether better customer retention, higher store utilisation and improved monetisation can eventually strengthen profitability.
Brokerage Emkay highlighted sustained double-digit sequential growth in Instamart's net order value, alongside improvements in customer retention and store utilisation, as factors that could support a stronger valuation.
3. Brokerages Reduce Swiggy Price Targets
Analysts have lowered their price targets despite retaining positive ratings on the company.
Jefferies maintained its 'buy' rating but reduced its target price to ₹330 from ₹435. Emkay also retained its 'buy' rating while cutting its target by 11% to ₹310.
Both brokerages see potential in Swiggy's food-delivery business and longer-term growth opportunities. However, the revised targets reflect concerns about how quickly Instamart can improve its financial performance.
What investors should watch: Instamart's losses, order-value growth, customer retention and store utilisation will remain important indicators of whether Swiggy can balance expansion with profitability.
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