about 22 hours ago

Swiggy Stock Posts Best Weekly Gain in a Year as Core Business Strengthens

Swiggy Ltd. $SWIGGY.NS, India’s food delivery platform, recorded its strongest weekly stock performance in a year, gaining over 9% amid signs of stabilization in its quick commerce unit and improving fundamentals in its main delivery business. The stock's five-week rally is the longest since its November IPO, signaling a potential inflection point after months of volatility.

Investor Confidence Returns After Sharp Decline

The recent surge marks a reversal from the all-time low seen just weeks ago, driven by concerns over losses in Swiggy’s rapid delivery arm. Investor sentiment has shifted following indications that the company is narrowing operating losses and optimizing unit economics in its quick commerce segment, where competition and thin margins have historically pressured profitability.

Morgan Stanley’s initiation of coverage this week with an “overweight” rating further catalyzed momentum. The investment bank cited improving delivery volumes, higher average order values, and operational efficiencies as key drivers behind its positive outlook. The reassessment also reflects growing conviction that Swiggy is closing the margin gap with key rival Zomato Ltd. $ZOMATO.NS.

Underlying Catalysts Behind the Turnaround

Improved Food Delivery Metrics. Increased order frequency, enhanced app engagement, and pricing discipline have led to higher revenue per customer.
Quick Commerce Loss Containment. Swiggy’s strategic shift towards fewer dark stores and optimized delivery radii is translating into better cost control in its Instamart division.
Institutional Support. Coverage from Morgan Stanley provides institutional credibility and draws attention to fundamentals over short-term price action.
Peer Comparison Shift. The narrowing performance and margin differential with Zomato reduces the valuation overhang that previously weighed on Swiggy's stock.
Market Sentiment Recovery. Broader confidence in India's tech IPO cohort—amid easing inflation and growing consumption—has added tailwinds for recent gainers like Swiggy.

Outlook Hinges on Margin Discipline

While top-line recovery is underway, sustained share price growth depends on Swiggy’s ability to achieve margin parity across verticals. The company’s push to recalibrate its quick commerce model and balance growth with efficiency will remain pivotal. As operational headwinds ease, investors are likely to focus on cash flow stabilization and breakeven timelines.

Zomato Food Delivery share price margin improvement Swiggy stock

2 Comments

Emma Collins@WealthInsider

about 20 hours ago

Swiggy's recent stock performance might be the turning point investors have been waiting for, showcasing its resilience in the competitive food delivery market.