Swiggy Stock Falls 7% as Q3 Loss Widens to ₹1,065 Crore

Introduction

Shares of Swiggy, a leading food delivery and quick commerce platform, declined by as much as 7% on Friday, hitting a low of ₹305 on the BSE. The sharp fall followed the company's announcement of its financial results for the third quarter of fiscal year 2026. Swiggy reported a consolidated net loss that widened to ₹1,065 crore for the quarter ending December 31, 2025, compared to a loss of ₹799 crore in the same period of the previous year. This increase in loss overshadowed a strong operational performance, where revenue from operations surged by 54% year-on-year (YoY) to ₹6,148 crore.

Detailed Financial Performance

Despite the widened YoY loss, Swiggy showed some improvement on a sequential basis. The net loss of ₹1,065 crore was a slight narrowing from the ₹1,092 crore loss reported in the second quarter of FY26. Revenue also demonstrated healthy quarter-on-quarter (QoQ) growth, rising 11% from ₹5,561 crore in the July-September period. The company's user base continued to expand, with average monthly transacting users (MTUs) increasing by 36.8% YoY to 24.3 million. Consolidated adjusted revenue climbed 51% YoY to ₹6,431 crore. However, the consolidated adjusted EBITDA loss widened by ₹16 crore sequentially to ₹712 crore, indicating persistent pressure on profitability from operational costs and investments.

Food Delivery: A Bright Spot

Swiggy's core food delivery business delivered a standout performance in the third quarter. The segment's Gross Order Value (GOV) grew by 20.5% YoY to reach ₹8,959 crore, marking its fastest growth rate in the last three years. This growth was fueled by a 22% YoY increase in MTUs, which reached 18.1 million after adding 0.9 million users during the quarter. Profitability metrics in this segment also improved significantly. The adjusted EBITDA margin improved to 3% of GOV, an increase of 56 basis points YoY and 22 basis points QoQ, reaching its highest level in two years. The adjusted EBITDA for the food delivery segment rose 13.1% sequentially to ₹272 crore.

Quick Commerce: Growth and Challenges

The quick commerce arm, Instamart, continued its aggressive expansion. Its GOV surged by an impressive 103.2% YoY to ₹7,938 crore, marking the fourth consecutive quarter of over 100% annual growth. The segment added 0.8 million MTUs and expanded its physical footprint by adding 34 new dark stores, bringing the total to 1,136 stores across 131 cities. The average order value (AOV) also rose by 40% YoY to ₹746, helped by an expansion in non-grocery items. While the contribution margin improved, the segment's losses increased. The adjusted EBITDA margin improved sequentially by 65 basis points to -11.4%, but the absolute loss for the segment widened by ₹59 crore QoQ to ₹908 crore, highlighting the high cost of growth and intense competition.

Management Commentary

Sriharsha Majety, Co-founder and Group CEO of Swiggy, described the food delivery segment's performance as the "standout highlight" of the quarter. He noted that the 20.5% YoY growth in GOV was the highest in three years and that strong demand during the festive season led to record order volumes. Majety also emphasized that quick commerce continues to gain traction as a preferred retail channel for urban consumers, even though growth was partially impacted by GST-related price cuts and base effects from an earlier festive season.

Analyst Views and Market Outlook

The mixed financial results prompted several brokerage firms to revise their outlook on Swiggy's stock. Motilal Oswal maintained a 'Buy' rating but lowered its target price from ₹530 to ₹440. The brokerage cited concerns that measured user additions could moderate GOV growth in the quick commerce segment and noted that Instamart's margins were below estimates. They believe near-term growth in quick commerce will remain under pressure due to aggressive competition. Similarly, Morgan Stanley retained its 'Equal Weight' rating but cut its target price from ₹414 to ₹375. The firm acknowledged the steady execution in food delivery but pointed to moderated growth in quick commerce as the company prioritizes quality over scale. Morgan Stanley cautioned that visibility on a potential re-rating of the stock remains limited due to high losses.

Conclusion

Swiggy's Q3 FY26 results present a dual narrative. The core food delivery business is showing robust growth and improving profitability, suggesting a strong and stable foundation. However, the rapid expansion of the quick commerce segment, while impressive in terms of growth, continues to be a significant drain on the company's finances. Investors appear focused on the widening losses and the challenging path to profitability for Instamart amid fierce competition. The company's ability to balance aggressive growth in quick commerce with sustainable unit economics will be critical in shaping its future financial health and regaining investor confidence.