Why Swiggy shares fell despite better Q1 results
What's the story
Swiggy's shares fell over 5% in intraday trading on the BSE today, a day after the company announced its June quarter (Q1FY27) results. The stock opened at ₹292.25 against its previous close of ₹295.8 and hit an intraday low of ₹280, down 5.34%. However, it recovered some losses later in the day to close at ₹284.78, down 3.7% from its previous close.
Financials
Swiggy's Q1FY27 net loss narrows to ₹791 crore
Swiggy's consolidated net loss for Q1FY27 stood at ₹791 crore, a significant reduction from ₹1,197 crore in the same period last year.
The company's consolidated revenue from operations also saw a massive 37% year-on-year growth, reaching ₹6,812 crore during this period.
Swiggy's food delivery segment witnessed a 17.4% year-on-year growth in Gross Order Value (GOV), reaching ₹9,490 crore.
Business growth
Instamart achieved contribution breakeven in Q1FY27
Meanwhile, Swiggy's quick commerce platform Instamart achieved contribution breakeven in Q1FY27 with over 45% of dark stores becoming contribution-positive.
The company plans to add nearly 75 stores in existing cities during Q2FY27 to improve customer experience and attract high-value customers.
Market response
ICICI Securities maintains 'Buy' rating, JM Financial downgrades stock
Brokerage firm ICICI Securities maintained a 'Buy' rating on Swiggy with a target price of ₹520. It noted the company's strong performance in Q1FY27 and its plans for future growth.
However, JM Financial downgraded the stock to sell from reduce earlier with a target price of ₹250, citing concerns about profitability improvement in Instamart without sufficient scale.
Brokerage insights
Bernstein and Motilal Oswal maintain positive outlook on Swiggy
Bernstein maintained its outperform rating with a target price of ₹430. The brokerage said the quick commerce business is witnessing favorable conditions for a re-rating and expects stronger performance in the coming quarters.
Domestic brokerage Motilal Oswal also maintained its 'Buy' rating but revised its target price to ₹350, citing steady food delivery execution with expanding margins as well as Instamart's contribution margin debate resolution.
International outlook
Macquarie maintains underperform, Elara Capital downgrades stock
Global brokerage Macquarie maintained its underperform rating with a target price of ₹230, citing slowed growth and increased cash burn. The firm also questioned Swiggy's path to adjusted EBITDA breakeven for Instamart.
Elara Capital downgraded the stock from buy to accumulate and revised its target price from ₹360 to ₹350, due to an extended path toward quick commerce EBITDA break-even beyond FY29 amid renewed expansion focus.