Swiggy Shares Retreats After Surge Amid Profit Booking

Swiggy’s share price, which closed 12% higher on Monday at ₹343.7 on the NSE amid optimism over its quick-commerce growth via Instamart, has reversed course. As of 01:30 PM, the stock is trading at ₹343.65, down 0.087%. The earlier uptick was driven by investor confidence in Swiggy’s strategic partnerships and infrastructure upgrades, though recent selling pressure has tempered gains.

Key Drivers Behind the Share Price Increase:

Strong Q3 FY25 Performance

Swiggy reported a 38% year-on-year growth in Gross Order Value (GOV), reaching ₹11,343 crore.Monthly Transacting Users (MTUs) rose by 25.3% YoY to 17.8 million, with significant cross-utilization across services.The food delivery segment achieved a 19.2% YoY GOV growth, with adjusted EBITDA increasing by 63.7% quarter-on-quarter to ₹184 crore, and margins improving from 0.3% to 2.5% YoY

Expansion of Quick Commerce Segment:

Instamart's GOV increased by 88% YoY to ₹3,907 crore, with a 14% increase in average order value.The platform added 96 new active stores, expanding its dark store area by 25% QoQ to 2.45 million sq. ft.

Strategic Business Initiatives:

Swiggy's 'Bolt' service, offering 10-minute food deliveries, now contributes to over 10% of total orders and has onboarded more than 45,000 restaurants.The company has diversified its offerings by partnering with Kalyan Jewellers to deliver gold and silver coins across 100 cities and collaborating with the cooperation ministry to sell cooperative dairy and organic products through Instamart.

Investor Sentiment and Market Positioning:

Swiggy is seen to have strong growth prospects in both food delivery and quick commerce, with improved execution expected to drive faster growth and profitability. The company is currently valued at a discount to rival Zomato, but this gap is likely to narrow as Swiggy maintains its growth momentum.

Anticipation of Q4 FY25 Earnings

Investors are optimistic about the upcoming Q4 FY25 results, with expectations of continued revenue growth and margin improvements.The company's strategic investments and expansion plans are anticipated to contribute positively to its financial performance.

Outlook:

Swiggy's recent performance and strategic initiatives have positioned it favorably in the competitive food delivery and quick commerce sectors. The company's focus on expanding its service offerings and improving operational efficiency is expected to drive continued growth and investor confidence.

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