Swiggy shares came under heavy selling pressure on Friday, October 23, after the food delivery and quick-commerce company reported its September-quarter results, prompting brokerages to lower their target prices. Although the company recorded strong revenue growth and narrowed its net loss compared with a year earlier, rising losses in its Instamart business and concerns about competition weighed on investor sentiment.
The stock fell as much as 15% during the session, touching a fresh 52-week low of around Rs 179.70 on the BSE and hitting the lower circuit. The sharp decline reflected investors’ concerns about how long Swiggy may take to achieve sustainable profitability, particularly in quick commerce.
The market reaction also showed that revenue growth alone may not be enough to reassure investors when operating losses remain high and rivals continue to expand aggressively.
Swiggy reported a consolidated net loss of Rs 922 crore for the July-September quarter of FY27, compared with Rs 1,092 crore in the corresponding period last year. However, the loss widened from Rs 792 crore in the June quarter.
Revenue from operations increased 36.1% year-on-year to Rs 7,571 crore from Rs 5,561 crore in the year-ago period. The company’s total expenses also rose to Rs 8,703 crore from Rs 6,711 crore a year earlier.
The results presented a mixed picture. Swiggy continued to expand its business, but higher costs and losses in quick commerce raised questions about how quickly that growth could translate into better financial performance.
Its consolidated adjusted EBITDA loss widened to Rs 760 crore from Rs 695 crore in the corresponding quarter last year. Adjusted EBITDA is a measure of operating performance that excludes certain expenses and adjustments.
Instamart remains central to the debate around Swiggy’s profitability. The quick-commerce platform is expanding its customer base and order volumes, but that growth comes with significant spending on dark stores, delivery operations, product availability and customer acquisition.
Instamart’s gross order value rose 31.4% year-on-year to Rs 9,230 crore in the September quarter. Its net order value increased 13.4% sequentially to Rs 6,954 crore.
The company added 69 dark stores during the quarter, taking its total network to 1,240. Expanding this network can improve delivery coverage and help Swiggy serve more customers, but it also adds to operating costs.
Instamart’s adjusted EBITDA loss widened to Rs 895 crore from Rs 849 crore a year earlier and Rs 778 crore in the June quarter. The sequential increase in losses was a key reason investors questioned the pace of the business’s turnaround.
Competition is another challenge. Blinkit, operated by Eternal, and Zepto are competing for customers through wider product selection, rapid delivery and investments in their store networks. Investors are watching whether Instamart can grow quickly enough to improve its economics without requiring prolonged heavy spending.
Several brokerages reduced their Swiggy share price targets following the results, although most remained positive about the company’s longer-term prospects.
Jefferies retained its Buy rating but cut its target price to Rs 330. It said the widening quick-commerce losses remained a key concern and that reducing these losses would be important for unlocking value. The brokerage also argued that Swiggy’s current share price did not fully reflect the value of its food delivery business and cash holdings.
Nomura maintained its Buy rating but reduced its target price to Rs 300 from Rs 435. It expects competition and reinvestment by rivals to limit margin expansion over the next 12 months. The brokerage continues to view food delivery as a cash-generating business but remains cautious about the company’s overall earnings outlook.
Bernstein retained its Outperform rating while cutting its target price to Rs 350 from Rs 430. It highlighted slower growth in Swiggy’s core food delivery business compared with rival Eternal and concerns about Instamart’s path to profitability. Bernstein also pointed to Toing, Swiggy’s affordable-meal offering, as a factor affecting reported growth in the core food delivery business.
Motilal Oswal lowered its target price to Rs 280, citing weaker-than-expected quick-commerce growth and an extended period before Instamart can achieve profitability. Elara Capital, meanwhile, upgraded Swiggy to Buy from Accumulate but reduced its target price to Rs 300 from Rs 350.
The differing recommendations indicate that analysts continue to see value in Swiggy’s established food delivery business, even as they reassess the costs and growth assumptions attached to quick commerce.
Swiggy’s next challenge is to demonstrate that expanding order volumes can lead to better margins and lower cash burn. Investors will closely track Instamart’s losses, the pace of dark-store expansion and food delivery growth in the coming quarters.
For now, the company’s strong revenue growth offers a positive sign, but the widening quarterly loss and mounting competitive pressure remain significant concerns. A clearer path towards quick-commerce profitability will be crucial if Swiggy is to rebuild investor confidence and support a recovery in its share price.
