Swiggy Ltd.'s third-quarter earnings have invited mixed views from analysts, who flag disappointing quick commerce growth amid intense competition, noting relatively better food delivery performance.
UBS maintained a 'Buy' rating on Swiggy stock with a target price of Rs 510, a 22% upside potential over the previous close, citing improved food delivery performance but weaker-than-expected quick commerce growth.
The management reiterated its group-level break-even targets, though intense competition in the quick commerce space is expected to keep margin pressures high in the coming quarters, the brokerage said.
Meanwhile, Macquarie maintained an 'Underperform' rating on Swiggy with a target price of Rs 325, a 22% downside potential. It noted that quick commerce economics remain meaningfully challenged, with Instamart dragging down overall profitability.
While the brokerage acknowledged a clearer margin improvement path in food delivery, it flagged concerns over slower growth, challenged economics in quick commerce, and stretched valuations.
Macquarie also reiterated its preference for rival Zomato Ltd. over Swiggy as a platform, maintaining an 'Underperform' rating on both players.
After a period of intense competition and a frenzy of dark store openings, Zomato’s Blinkit, Swiggy Instamart, and Zepto are expected to moderate their expansion plans, according to a January report by HSBC Global Research.
The crowded space has also seen the entry of e-commerce majors Amazon and Flipkart.
Swiggy Q3 Result Snapshot
Swiggy's loss during the third quarter of the financial year ending March 2025 widened from the preceding quarter. The consolidated net loss for the restaurant-to-quick-commerce aggregator came in at Rs 799.08 crore in the October-December period, as compared to a loss of Rs 625.53 crore in the July-September quarter. Analysts tracked by Bloomberg had expected the company to post a loss of Rs 620 crore.
Revenue rose 10.9% from the preceding quarter to Rs 3,993.07 crore. The consensus estimate was Rs 4,019 crore.
The operating loss or the losses before interest, tax, depreciation and amortisation stood at Rs 725.66 crore, wider than the Rs 554.17 crore clocked in the three months ending September.
Swiggy Instamart, which is the company's quick commerce arm, logged a 17.7% sequential rise in revenue to Rs 576.5 crore. Gross order value growth was 5.5%. The company maintained guidance of doubling dark stores and raising dark store size by March.
Revenue of the food delivery segment was up 3.8%, while gross order value rose 3.4% sequentially.
Swiggy Share Price Movement
Shares of Swiggy closed 3.56% lower at Rs 418.05 apiece on Wednesday, ahead of the results. Since its listing in November, the stock has fallen by 8.32%.
Eleven of the 16 analysts tracking Swiggy have a 'buy' rating, two suggest a 'hold', and three have a 'sell', according to Bloomberg data. The average of the 12-month analysts' price target of Rs 550 implies a potential upside of 31%.
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