Swiggy stock drops 4.4% after wider losses in quick-commerce business
Investors are watching quick-commerce companies closely as expansion spending and intensifying competition challenge efforts to improve profitability across the sector.
Swiggy's stock plummeted 4.4% following the company's revelation of wider losses in its quick-commerce business, Instamart. The Instamart operator reported a widening of adjusted core loss to ₹895 crore in the second quarter, up from ₹849 crore in the previous year. This news has renewed focus on profitability for both Swiggy and its rival Eternal, which have both been intensively expanding their dark store networks.
Jefferies, a brokerage firm, expressed concern over Instamart's losses and revised its target price for Swiggy shares from 435 rupees to 330 rupees. Despite the downturn, Emkay, another brokerage, maintains a "buy" rating for Swiggy, citing strong operating leverage and potential for higher valuation due to improving customer retention, monetisation and store utilisation.
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