Ripple effect? Swiggy shares tumbled 11% today; here's what analysts have to say

Swiggy Ltd shares saw a sharp cut in Tuesday's trade, diving 10.81 per cent to hit a low of Rs 427.20. At this price, the stock has corrected 30.76 per cent from its record high level of Rs 617, seen on December 23 last year. Today's drop came when shares of another quick-commerce firm -- Zomato -- were hit hard. Zomato slumped 12.78 per cent to Rs 210.15 level after reporting a 57.24 per cent drop, year-on-year (YoY), in its consolidated net profit for the December 2024 quarter (Q3 FY25).

During the quarter under review, profit slipped to Rs 59 crore from Rs 138 crore in the year-ago period. However, revenue from operations surged 64.39 per cent to Rs 5,405 crore in Q3 FY25 as against Rs 3,288 crore in the corresponding period last fiscal.

Zomato said its bottomline (adjusted EBITDA) grew 128 per cent YoY, however, on a QoQ basis, adjusted EBITDA fell 14 per cent due to investments in expedited new store openings and new customer acquisition on quick commerce business.

"After Zomato results were out, we are witnessing a profit booking in both Swiggy and Zomato. These are futuristic stocks and the companies have to improve their revenue parameters. The market is expected to be apprehensive in the medium- to short-term. Investors with a high-risk appetite can consider holding on to the stocks," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.

Swiggy vs Zomato

ICICI Securities said, "Swiggy has showcased great execution on 'Swiggy BOLT', their 10-min food delivery offering and 'Swiggy BLCK', their premium loyalty offering. Management notes Bolt now forming ~9 per cent of Swiggy's food delivery Gross Order Value (GOV). We think only 200–300 basis points (bps) of this is fresh demand; the rest is replacement demand. In our view, this additional demand could aid in market share gains in the near term. Swiggy offers a more reasonable valuation (15-25 per cent discount on EV/EBITDA and EV/Sales) for each business segment compared to Zomato. We initiate coverage on Swiggy with BUY and a target price of Rs 740."

"We see the Swiggy stock trading at Rs 850 in our bull-case scenario and Rs 415 in our bear-case, implying a risk-reward skew of 3.8:1 to the upside," the brokerage added.

Technical view

An analyst suggested avoiding Swiggy's stock at current levels. "Given the prevailing weakness and lack of bullish signals, Swiggy remains in a no-trade zone for now. Investors are advised to exercise caution and avoid initiating fresh positions until clearer signs of trend reversal emerge. We recommend staying on the sidelines and reevaluating the stock once market conditions improve," said Ameya Ranadive Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox.