Shares of Swiggy Ltd surged by 2.5% to Rs 434 following the company's Q2 results, which revealed a narrowing of its net loss despite remaining significant. The report highlighted a strong performance from Swiggy’s quick commerce arm, Instamart, which contributed positively to the overall results. According to global brokerage firm Jefferies, the increase in average order value is a key driver for growth in this segment. However, Jefferies indicated that achieving profitability in quick commerce will necessitate an increase in the take-rate and enhanced network utilization, and set a price target of Rs 500 per share based on robust food delivery growth and margin expansion.
Despite the positive outlook, concerns linger regarding Swiggy's market share, particularly in light of competition from Eternal's Blinkit. HSBC noted that while the results offered some encouragement, the ongoing loss of market share is troubling. The investment firm identified potential areas for improvement, such as reducing marketing expenses and improving the take-rate, which currently lags behind competitors like Blinkit and Zepto. Meanwhile, DAM Capital pointed out that the narrower-than-expected quick commerce losses stemmed from maturing stores and the Maxxsaver strategy, forecasting that Instamart could achieve adjusted EBITDA profitability by FY28.
Swiggy reported a consolidated net loss of Rs 1,092 crore for the second quarter ending September 2025, up from a loss of Rs 626 crore in the same period last year. However, revenue from operations saw a substantial increase, rising to Rs 5,561 crore from Rs 3,601 crore a year ago. Nomura set an optimistic price target of Rs 560 based on strong growth expectations in both food delivery and quick commerce, projecting a 19-20% GOV growth in FY26-27. Despite these encouraging signs, the stock has experienced a 22% decline in 2025, reflecting the challenges the company faces in a competitive market. As Swiggy continues to navigate these hurdles, it remains crucial for the company to focus on enhancing operational efficiency and market positioning.