Swiggy’s shares dropped 11% to ₹427 on January 21, 2025, following Zomato’s weak quarterly results. This marked an 8-week low for Swiggy, raising concerns among investors in the competitive food delivery and quick-commerce sectors.
Swiggy, India’s leading food delivery platform, experienced a sharp 11% drop in its shares on January 21, 2025, marking its biggest single-day loss since its listing in November 2024. The decline took the stock to ₹427, an 8-week low, as negative sentiment surrounding its competitor Zomato sent ripples across the food-tech industry.
Swiggy, which operates in both the food delivery and quick-commerce sectors, saw its shares mirror a sell-off in Zomato’s stock, which plunged by 13.3% following disappointing quarterly results. Zomato, which recently posted a 57.3% YoY drop in profitability for Q3FY25, has faced increasing losses from accelerated investments into dark-store expansions and customer acquisition for its quick commerce arm, Blinkit. Zomato’s challenges have raised concerns among investors, affecting market sentiment towards Swiggy as well.
Despite the drop in share price, analysts have noted that Swiggy’s stock is still trading at a discount compared to Zomato, with a 35%-40% valuation gap. However, competition in the quick-commerce space remains fierce, with startups like Zepto and major players like Walmart-backed Flipkart and Tata-backed BigBasket intensifying pressure.
Swiggy, which competes with Zomato in the delivery and quick-commerce space through its Instamart business, has seen improvements in volume growth in 2024, narrowing the gap with Zomato, which previously outpaced Swiggy in 2023. Swiggy’s all-in-one app approach, which integrates its services to offer seamless user experiences, is considered a key differentiator that could drive future growth.
Although analysts remain positive about the long-term potential of the quick-commerce sector, Swiggy’s short-term outlook is tied to navigating the competitive landscape and leveraging its strategic advantages to stay ahead of its rivals.
