Swiggy share price plunged over 9% in early trade on Friday after the company reported its Q2 results.The stock declined as much as 9.79% to Rs 190.60 apiece on the BSE.
The food delivery and quick-commerce platform's net loss in Q2FY27 narrowed to Rs 922 crore from Rs 1,092 crore in the same period a year ago. he loss was wider than the estimate of Rs 871 crore.
Revenue from operations rose 36.1% YoY to Rs 7,571 crore from Rs 5,620 crore, exceeding the Bloomberg estimate of Rs 7,336 crore.
The company's adjusted EBITDA loss stood at Rs 760 crore, down by Rs 64 crore YoY.
EBITDA loss was at Rs 770 crore as against Rs 798 crore a year earlier but was higher than the estimated loss of Rs 595 crore.
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Gross order value (GOV) of its food delivery business grew 17.7% YoY to Rs 10,054 crore, while adjusted EBITDA increased by Rs 101 crore to Rs 341 crore. Its adjusted EBITDA margin stood at 3.4% of GOV.
On FY27 outlook, Swiggy sees GOV, excluding Toing, growth at 18-20%. It does not expect quick commerce competition to ease in the near term.
Should you buy, sell or hold Swiggy shares after Q2 results?
Swiggy Q2 results drew mixed reactions from brokerages, with analysts flagging widening losses in its quick commerce business, Instamart, despite early signs of growth recovery.
UBS maintained its ‘Buy' rating on Swiggy shares with a target price of Rs 375, despite weaker-than-expected overall results.
Swiggy Instamart's net order value (NOV) increased 35% YoY and 13% sequentially to Rs 6,550 crore. However, contribution margin deteriorated to -1%, and adjusted EBITDA losses widened to Rs 900 crore, exceeding estimates.
UBS noted that Instamart's absolute adjusted EBITDA losses may have peaked in Q2FY27. Management expects double-digit sequential NOV growth in the December quarter, with contribution margins remaining between -1% and zero.
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BofA reiterated its ‘Neutral' rating but reduced its target price by 11% to Rs 245, citing disappointing quick commerce growth and higher-than-expected losses. The brokerage also cut its earnings estimates and lowered Instamart's target valuation multiple.
BofA highlighted that food delivery remains the key contributor to Swiggy's valuation, accounting for 71% of its sum-of-the-parts valuation, while quick commerce contributes just 5%.
Macquarie maintained its ‘Underperform' rating, citing persistent cash burn and intense competition in quick commerce.
Management expects profitability to improve gradually through higher monetisation, better product mix and cost efficiencies. However, Macquarie cautioned that sustained growth continues to require pricing and network investments, potentially extending Instamart's path to break-even.
At 9:35 AM, Swiggy share price was trading 9.63% lower at Rs 190.95 apiece on the BSE.
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