Swiggy Shares Plunge 15% Following Q2 Financial Results

Swiggy's shares experienced a dramatic decline today, October 23, dropping 15% to reach a lower circuit limit of Rs 179.65. This downturn follows the company's announcement of wider losses in its quick-commerce operations for the July-September quarter of the financial year 2026-27. The results have intensified scrutiny on Swiggy's profitability, especially in light of rival Eternal's recent quarterly performance.

In its latest financial report, Swiggy revealed a consolidated net loss of Rs 922 crore for Q2 FY27, a decrease from the Rs 1,092 crore loss recorded in the same quarter of the previous year. However, this figure marked an increase from the Rs 792 crore loss reported in the preceding June quarter. Revenue from operations rose by 36% year-on-year, totaling Rs 7,571 crore, up from Rs 5,561 crore in the previous year. Despite this growth, total expenses surged to Rs 8,703 crore, up from Rs 6,711 crore a year prior, contributing to a widening adjusted EBITDA loss of Rs 760 crore.

Swiggy's food delivery segment reported a gross order value growth of 17.7% year-on-year, reaching Rs 10,054 crore. Sriharsha Majety, the company's MD and Group CEO, highlighted the food delivery business's record profits and margins while noting the successful expansion of Instamart, which added 69 dark stores this quarter, bringing its total to 1,240 stores.

Despite these positive metrics, brokerages have expressed caution regarding Swiggy's quick-commerce profitability and competitive standing. HSBC downgraded its target price for Swiggy from Rs 315 to Rs 240, citing concerns over market share losses and competition. CLSA maintained an 'Outperform' rating but reduced its target price to Rs 262, while Nomura cut its target price to Rs 300, emphasizing execution challenges in quick commerce. Jefferies also lowered its target price to Rs 330, noting a significant increase in Instamart's adjusted EBITDA losses.

Looking ahead, Swiggy faces the challenge of improving its quick-commerce segment to regain investor confidence. As brokerages reassess their outlook based on the latest earnings, the company must navigate a competitive landscape while striving for profitability. Upcoming quarters will be crucial for Swiggy as it seeks to enhance its operational performance and address the concerns raised by analysts.