Swiggy shares experience their greatest one-day decline since listing, plunging 11% to an 8-week low. This is the reason.

After Zomato's poor quarterly results alarmed investors, Swiggy's stock fell 11% to ₹427 on January 1, making it an 8-week low.

After Zomato, the company's director and rival, released a poor set of results for the December-ending quarter, investors became alarmed, causing Swiggy, the well-known food delivery aggregator, to see its shares fall 11% in Tuesday's trading (January 21) to an 8-week low of ₹427 per.

The stock saw its largest intraday decline since its IPO in November of last year. The stock is now trading close to its listing price of ₹420 per share as a result of the decrease. The stock is currently trading 11% higher than its issue price of ₹390 per share.

Zomato's stock fell 13.3% to a 6-month low of ₹207.80 per share as analysts lowered their target price in response to the poor set of results. Swiggy, its competitor, was also affected negatively.

Due mainly to higher spending in faster new dark-store openings and customer acquisition efforts in the quick commerce (QC) segment, Zomato's profitability fell by 57.3% YoY in Q3FY25 to ₹59 crore.

As it speeds up its investments for store growth, Blinkit intends to continue to turn a profit in the near future. The company reported a net loss of 103 crore for the quarter.

Before reporting a 1.3% loss in the third quarter of FY25, the company's adjusted EBITDA as a percentage of GOV almost broke even in the second quarter. Analysts currently predict that this loss will increase in the near future before breaking even in 4QFY26E due to the increase in dark retailers. Analysts have therefore lowered their PAT projections for FY25–27 by 25%.

As businesses concentrate on growing their presence across many locations, the QC industry is becoming more competitive, which is driving up costs. By December 2025, Zomato anticipates that Blinkit will have 2,000 stores, one year ahead of its initial goal of December 2026.

Swiggy uses Instamart to manage its quality control business. Other companies in the same market include Zepto, a startup, and well-funded competitors like Flipkart, which is backed by Walmart, and BigBasket, which is backed by the Tata Group.

Analysts are nonetheless optimistic about the Quick Commerce segment in the long run because they think it presents a generational chance to take part in the upending of sectors like grocery, retail, and e-commerce.

According to analysts, Swiggy's stock is now trading at a lower valuation than Zomato's. Global brokerage UBS previously stated that Swiggy's shares is trading between 35 and 40 percent lower than Zomato's.

Analysts had previously noted that Swiggy's volume growth in CY24 had improved after trailing Zomato's in CY23, resulting in a significant narrowing of the two companies' volume growth gaps.

Analysts emphasized that Swiggy's all-in-one app strategy, which facilitates smooth service cross-utilization and boosts operational efficiency, is its strategic edge. They think that as the business negotiates the rapid commerce and food delivery industries, this integrated approach may prove to be a crucial differentiation.