Share Price of Swiggy Falls 7.4% Post Q3 Earnings Report

Swiggy's share price took a sharp 7.4% dive during Thursday's trading session, slipping below its IPO price of ₹390. The fall comes after the company reported a consolidated net loss of ₹799.08 crore for Q3 FY24, a significant increase from ₹574.38 crore in the same period last year.

Q3 Financial Highlights

Swiggy's Q3 earnings report painted a mixed picture. While the company's total expenses surged to ₹4,898.27 crore from ₹3,700 crore, it also posted revenue growth, with revenue from operations rising to ₹3,993.06 crore, up from ₹3,048.69 crore a year earlier.

Key metrics for the quarter:

• Gross Order Value (GOV): Grew 38% YoY, reaching ₹12,165 crore.
• Food Delivery Revenue: Increased 19.2% YoY to ₹7,436 crore.
• Adjusted EBITDA: Increased 63.7% QoQ to ₹184 crore
• Adjusted EBITDA Margin (Food Delivery): Improved to 2.5%, up from 0.3% last year.
• Quick-Commerce Segment: Investments in Instamart and other quick-commerce services led to a broader contribution margin loss of -4.6%.

Market Reaction

Swiggy shares opened at ₹387.95 on the BSE, hitting an intraday low of ₹387 and a high of ₹410.75. The decline pushed the stock below its IPO price, raising concerns among investors about the company's ability to balance growth and profitability.

CEO's Perspective

Sriharsha Majety, MD & Group CEO of Swiggy, highlighted the company's focus on targeted consumer offerings during the festive season. While the food delivery business showed positive momentum with improved margins and cash flow, the quick-commerce segment faced intense competition and higher marketing costs, which weighed on overall profitability.

Conclusion

Swiggy's Q3 results reflect a company in transition, balancing the growth of its core food delivery business with investments in quick-commerce. While the revenue growth is promising, the rising losses are a concern for investors looking for near-term returns.

Investors should carefully evaluate their position based on the company's growth trajectory and the broader market outlook.