Following the company’s announcement of a consolidated loss of Rs 799 crore for the December quarter, which increased from a loss of Rs 574 crore during the same period last year, Swiggy’s shares fell 7.4% to a new 52-week low of Rs 385.25 on the BSE on Thursday, February 6.
Nonetheless, Q3FY25’s operating revenue was Rs 3,993 crore, up 31% from Rs 3,049 crore in the same period of the prior fiscal year.
Early trading on February 6, 2025, saw a precipitous 5% drop in Swiggy’s share price, raising worries and inquiries among investors. This decline comes after Swiggy’s Q3 numbers were released, showing a growing net loss in spite of sales increases. The market is responding to a number of variables, such as analysts’ updated target prices and heightened competition in the rapid commerce space. In order to help investors decide whether to purchase, sell, or hold onto Swiggy shares, this article delves deeply into the company’s performance, providing expert views and a thorough analysis.
Released on February 5, 2025, Wiggy’s Q3 FY25 results showed a mixed financial picture. Consolidated net loss increased to ₹799 crore from ₹574.4 crore in the same period last year, despite consolidated revenue from operations showing a strong 31% year-over-year (Y-o-Y) rise, rising to ₹3,993 crore from ₹3,049 crore in Q3 FY24. Additionally, gross order value (GOV) increased significantly, increasing 38% year over year to ₹12,165 crore. Revenue from the quick commerce business more than doubled, but this segment continued to turn a loss due to a highly competitive environment that increased marketing expenditures and pushed ahead dark store expenses.
Due to differing opinions on Swiggy’s prospects, a number of brokerage companies have modified their price targets for the company. Bernstein reduced its price target from ₹635 to ₹575 but kept its “outperform” rating. UBS has maintained its “buy” recommendation with a ₹615 price target. With a price target of ₹325, Macquarie, on the other hand, has an “underperform” rating. It bases this on stretched valuations, slower growth in food delivery, and worries about the Quick Commerce segment’s economics. With a target price of ₹750 and an “outperform” rating, CLSA provides the most positive view. These differing viewpoints draw attention to the difficulties and unknowns underlying Swiggy’s valuation.
Swiggy’s stock ended at ₹409.00 on the BSE on February 5, 2025, with 8,174.58 shares traded. The 52-week high and 52-week low of the stock are ₹617.30 and ₹389.05. Technical analysis indicates that there is a greater chance of achieving negative objectives if Swiggy’s price is trading below ₹415.7. Potential downside targets include ₹409.35 and ₹402.2. On the other hand, upward targets of ₹422.85 and ₹429.2 become more reachable if the price stays above ₹415.7. Based on transient price changes, these levels give traders possible entry and exit options.
FACTORS INFLUENCING SWIGGY SHARE PRICE:
Several factors are currently influencing Swiggy’s share price:
Q3 Financial Performance: The strong revenue growth has been overshadowed by the growing net loss, which has generated negative sentiment.
Rapid Commerce Difficulties: Profitability in the Quick Commerce segment is being negatively impacted by fierce competition and pressure on margins.
Analyst Ratings: Market volatility and investor anxiety are exacerbated by divergent analyst judgments.
Overall Market Sentiment: Swiggy’s stock performance is influenced by investor confidence and broader market trends.
Competitive Environment: In the platform-oriented stock category, Zomato’s performance and Macquarie’s preference for Zomato over Swiggy put further pressure on the company.
EXPERT’S OPINION AND FUTURE OUTLOOK:
A cautious approach to Swiggy shares is advised by experts. Although some analysts remain optimistic, pointing to the company’s market position and growth prospects, others voice worries about valuation and pressure from competitors. Although the management’s restatement of the group-level break-even targets offers some consolation, the timetable is still unclear in light of the state of the market.
