Title: Swiggy Shares Plunge After Losses Mount on Intense Competition
Content: Swiggy Ltd. shares fell to a record low after intense competition led to wider-than-expected losses. The stock tumbled 17% in Mumbai for its biggest intra-day slide on record. The shares have lost more than half their value since the company’s 2024 initial public offering, leaving it with a market value of $5.2 billion.
Swiggy faces competition from local peer Eternal Ltd., as well as e-commerce titan Amazon.com Inc. and Walmart Inc.’s Flipkart, all seeking a larger slice of India’s growing rapid-delivery market. An expansion of their warehouse networks, called dark stores, and a push into smaller cities is increasing costs at all the firms.
Net loss at Swiggy amounted to 9.22 billion rupees ($97 million) for the quarter through September, missing the average analyst estimate for a loss of 8.71 billion rupees. Investor concern has also been building around its profitable food delivery segment. Eternal’s Zomato is “likely starting to take market share” in the food business as its growth accelerates, Goldman Sachs Group Inc. analysts led by Manish Adukia wrote in a note.
India’s rapid commerce sector has attracted tens of billions of dollars by some of the world’s largest private investors such as Masayoshi Son’s Soft Bank, Singapore’s Temasek and Lightspeed Venture Partners. But the sector is far from moving in the black. Earlier this year, smaller rival Zepto pushed back plans for an IPO after failing to secure its anticipated valuation. Still, the latest drop in valuation has made Swiggy shares attractive to Elara Capital. The brokerage upgraded the stock to a buy, saying the value of the company’s food-delivery business and cash alone is 23% above its current market price, effectively assigning no value to quick commerce. Others remain cautious. “Concerns remain around Swiggy’s execution track record,” Morgan Stanley analysts led by Gaurav Rateria in a note. “Until the company demonstrates consistent execution, investors are likely to continue debating its strategic choices.”
FAQ Q: Why did Swiggy shares fall sharply?
FAQ A: Swiggy shares fell due to wider-than-expected losses and intense competition from rivals like Eternal Ltd., Amazon, and Walmart’s Flipkart in India's rapid-delivery market.
Fonte: Bloomberg Markets · Resumido por HeadlinesBriefing