Blitz Bureau
NEW DELHI: Shares of Swiggy, online food delivery and quick-commerce firm, fell to a record low recently after wider losses in its quick-commerce business renewed concerns over cash burn and the company’s path to profitability.
Swiggy, Amazon, Flipkart and Zomato parent Eternal have poured billions of dollars into quick-commerce market, where players such as Elternal’s Blinkit, Zepto and Swiggy’s Instamart are competing to deliver groceries and other essentials within minutes.
“The market is basically saying Swiggy is burning cash, but still not growing at the expected pace and which is not even at the pace of competitors,” said Akshay D’Souza, an independent consumer consultant.
Instamart added 69 net dark stores in the September quarter, taking its total to 1,240, while rival Blinkit added 308 to reach 2,751.
The race to add dark stores and capture market share has driven up costs, putting pressure on margins and sharpening investor focus on whether Swiggy and rival Eternal can improve unit economics without sacrificing growth.
Eternal’s Blinkit reported an adjusted core profit of Rs 1.84 billion ($19.38 million), a turnaround from a loss of Rs 1.56 billion in the year-ago period.
Meanwhile, Instamart’s adjusted core loss widened to Rs 8.95 billion in the second quarter from Rs 8.49 billion a year earlier.
Swiggy said it would now focus on deepening Instamart’s presence in existing markets rather than expanding into new ones, signalling a more measured approach after aggressive expansion.
Instamart’s losses remain a key investor concern, Jefferies said, adding that Swiggy’s current share price does not fully reflect the value of its food-delivery business and cash holdings.
