Highlights:
- Swiggy Shares Plunge: Swiggy shares saw a sharp decline of over 6%, trading at Rs 340.4 per share on February 11, continuing a losing streak that now spans five consecutive sessions.
- Zomato Shares Down by 5%: Zomato shares fell nearly 5%, trading at Rs 216.40 per share, reflecting ongoing pressure from its weak Q3 performance.
Swiggy’s Struggles:
- Q3 Losses: Swiggy reported a net loss of Rs 799 crore for the quarter ending December 31, 2024, widening from the Rs 574 crore loss during the same period in the previous year.
- Stock Performance: Since the Q3 results were announced on February 5, the stock has fallen nearly 26%. This decline has pushed Swiggy’s shares below its listing price of Rs 420 per share on the NSE (a 7.69% premium), marking a 19% fall from its debut price.
- Analyst Ratings: Motilal Oswal has maintained a ‘Neutral’ rating on Swiggy, reducing its target price from Rs 520 to Rs 460, implying a 35% upside potential from the current price.
Zomato’s Decline:
- Q3 Net Profit Drop: Zomato posted a 57% year-on-year decline in net profit for Q3, falling to Rs 59 crore, which negatively impacted investor sentiment.
- Stock Fall: After hitting an all-time high of Rs 304 in December, Zomato’s stock has now dropped nearly 29%.
- Jefferies Downgrade: Jefferies downgraded Zomato to a ‘hold’ rating, citing concerns over rising competition in the quick commerce space and the significant stock price increase through 2024.
- Block Deals Impact: The stock also faced pressure from large block deals on exchanges, further accelerating its fall on February 11.
Broader Market Impact:
- Both Swiggy and Zomato’s declines come amid a broader market downturn. As of 1:30 PM, the Sensex was down 1,102.78 points (1.43%) at 76,209.02, and the Nifty had fallen by 340.5 points (1.46%) to 23,041.10.
The continued loss of value for Swiggy and Zomato reflects investor concerns about their profitability and competitive positioning in the food delivery and quick commerce markets.
