Swiggy's stock declined over 1.5%, trading at ₹310 per share on May 9, just before the company announced its Q4 FY25 financial results. The drop reflects cautious investor sentiment as the market awaits Swiggy's performance for the January–March quarter.
Meanwhile, its key rival, Eternal (formerly Zomato), also saw a significant slump, with shares falling 1.8% to ₹226 apiece. The concurrent dip in both companies' stocks highlights ongoing volatility in India's competitive food delivery sector, where Swiggy and Eternal are considered to maintain a duopoly.
Why Are Swiggy and Eternal Shares Falling?
The market is pricing in concerns over Swiggy's Q4 performance, likely drawing parallels to Eternal's recently released results. Investor anxiety is tied to the sector's growing challenges in achieving sustainable profitability amid heightened competition and shifting business models.
Eternal (Zomato) Q4 FY25 Results Recap
Eternal, the parent company of Zomato and Blinkit, reported a 78% year-on-year drop in net profit, falling to ₹39 crore for the quarter ending March 2025. However, the company delivered robust top-line growth, with revenue from operations up 64% YoY to ₹5,833 crore.
As part of efforts to streamline operations and concentrate on core profitability, Eternal discontinued two of its services:
- 'Quick' – it's a 15-minute food delivery initiative
- 'Everyday' – a home-style meal delivery service
The company cited a lack of a clear path to profitability for these verticals without sacrificing user experience.
Leadership Comments on Strategy & Competition
Eternal CFO Akshant Goyal stated that the company prioritizes long-term market share over short-term profits. Echoing this, Eternal CEO Deepinder Goyal acknowledged the stiff competition in the food delivery industry.
"Competition in food delivery has always been high, and the intensity hasn't changed in the last quarter. Our market share has remained stable, and we hope to gain further going forward," said Goyal.
Swiggy Q3 FY25 Performance Snapshot
Swiggy, listed on Indian stock exchanges in 2024, posted a net loss of ₹799 crore in Q3 FY25, representing a 39% increase compared to the previous year. Despite widening losses, Swiggy's revenue from operations rose 31% YoY, reaching ₹3,993 crore, up from ₹3,049 crore in Q3 FY24.
The company's upcoming Q4 earnings will be closely watched for signs of recovery or continued pressure.
Sector Outlook
The recent dip in Swiggy and Eternal shares suggests that investors are bracing for continued turbulence in the online food delivery sector. With profitability pressures, rising customer acquisition costs, and increased competition, market players may continue facing headwinds in the near term.
Easy & quick
Leave A Comment?