Swiggy, a big name in food delivery in India, is facing tough times. Once valued at ₹617 in December, their stock has dropped by 43%, losing ₹60,000 crores in market value. Now, it’s 9% below its IPO price of ₹390.
Competition is fierce in the quick commerce (QC) area, where companies like Zomato’s Blinkit and Flipkart are offering steep discounts, making it harder for everyone to make a profit. Experts warn that Swiggy’s losses could increase over the next few years as they try to grow their QC business.
Swiggy’s food delivery, which used to be a strong source of money, is also slowing down. Its growth in city areas is not as strong as before. Analysts at Jefferies think that Swiggy’s quick commerce plan is risky and not making money, with losses expected to continue until FY27.
Despite these challenges, some believe Swiggy is still a good investment. JM Financial says that after the tough times are over, Swiggy’s growth could improve, and people may start spending more money again because of possible tax cuts.
Looking at the cash issues, analysts think quick commerce has a bright future. Swiggy’s Instamart has become a major player and is projected to grow significantly by FY27. Some experts also believe that the current drop in Swiggy’s stock presents a great opportunity for long-term investors, as they can buy now while prices are down.
In summary, while Swiggy is experiencing short-term struggles with competition and cash, its long-term potential still looks promising. It’s crucial for investors to consider the risks and rewards when investing in companies like Swiggy.
Leave a Reply