Swiggy Enters The Cauldron

After a spell of running with the bulls, Swiggy is grappling with bears. The stock fell below its issue price this week and the pre-IPO concerns around overvaluation are finally playing out in the public markets.

On the final day of trading in the week, Swiggy stock fell up to 2.5% to INR 379.20 on the BSE, around 3% below the IPO issue price of INR 390, before ending the week at INR 380.

Despite reporting YoY revenue jump of 31%, Swiggy’s Q3 loss widened to INR 799 Cr, and the company did not exactly show the kind of growth expected on the quick commerce front, where revenue and average order value growth was under par.

In fact, most analysts expect Swiggy’s operating losses to balloon in Q4, and in many ways this also calls for more patience from investors.

The dual effect of dark store expansion and growing customer acquisition costs are likely to significantly intensify the pressures on Swiggy’s stock price in the opinion of many brokerages covering the stock .

To be clear, most brokerages are bullish on Swiggy because of improvements in the food delivery business, where the take rate has remained steady. Many credit the launch of Bolt as a key factor in keeping food delivery on track. It is Instamart that is a problem area.

Brokerages expect a sharp deterioration in Instamart’s margin profile due to heightened competition, and higher spending on expansion. Among the marquee brokerages, the likes of JP Morgan, Bernstein, Motilal Oswal and JM Financial slashed the price targets for March 2026.

However, UBS, BofA Securities, JM Financial and Kotak remained bullish, expecting an upside of between 18% and 60% from the current price.

JP Morgan saw the biggest adjustment in the price targets. “While elevated competition and quick commerce losses could weigh on the stock, superior food delivery growth with similar margin expansion is the key silver lining in the print,” the brokerage said.

However, most brokerages believe this correction in the stock price is an ideal entry point for Swiggy. Quick commerce is a valid opportunity and Swiggy has not lost the race by any stretch of the imagination. In fact, the company added more stores in January 2025 alone compared to all of Q3 (October-December 2024).

Swiggy wants to add 100-plus dark stores over February and March to meet its target of 1,000 dark stores by March 2025. Many of these will take over a year to turn profitable. Some even longer.

The company is also replacing small-format stores in some cities with larger stores and adding megapod stores in other cities. All of this expansion is only likely to pay off after the next three quarters.

Contribution-level breakeven is expected in a year, but that’s not a given. It’s a bet that the scale itself is enough to pull Swiggy through. Having said that, some brokerages believe that to be the case.

Quick commerce offers significant operating leverage advantages at scale which JM Financial says could itself be a reason to continue believing in Swiggy.

Keeping Faith With Swiggy

That’s part of the larger narrative around Swiggy — CLSA titled its Q3 coverage ‘Keeping faith’. Reading it with Zomato’s profit slump in Q3, Swiggy is clearly not the only one that will call on the faith of the public markets.

Indeed, Swiggy is going through exactly what Zomato (and even Paytm) went through soon after listing. And after the highs of the IPO frenzy, both new-age tech stocks shed more than 50% of their value in a matter of three months. Zomato saw a sharp recovery only after reporting improved financials, and even now, the stock price is heavily influenced by the company’s financial performance.

For the next year, at least, investors keeping their faith will have to swallow this pill for Swiggy as well. In the short term, there might be some accumulation of the stock as the price remains low.

There will be more value on offer with new IPOs on the cards for a number of startups as we said last week. But as per analysts, this is unlikely to put pressure on Swiggy from a portfolio perspective — what Swiggy needs to guard itself against is a less aggressive approach for revenue growth.

The heat is definitely on for Swiggy in the cauldron of the public markets.

New-Age Tech Stock In Focus: Ola Electric

After reaching an all-time low of INR 64.68 last week, shares of Ola Electric continued their downward movement this week. The company’s shares slipped 6.08% from Monday opening to end the week at INR 70.02.

While Ola Electric’s shares continued to reel under a bearish investor sentiment throughout the week, the same was accelerated at the end of the week when the company disclosed an underwhelming financial performance for Q3 FY25. After opening at INR 72.14 on Friday, the company’s shares dropped over 5% during intraday trading after the financial disclosure.

Ola Electric’s consolidated net loss widened 50% to INR 564 Cr from the INR 376 Cr loss it incurred in Q3 FY24. While its revenue from operations declined 19% YoY to INR 1,045 Cr, its scooter sales also fell 3% YoY and 15% QoQ to 84,029 in Q3 FY25.

Top Gainers & Losers

Robust top line expansion in Q3 led to a bull run for Blackbuck this week, while the Firstcry stock had a week to forget as a crash was sparked by lock-in expiry concerns.

Brokerage Corner: “BlackBuck Deeply Entrenched In The Ecosystem” — JM Financial

Logistics company BlackBuck reported a robust growth in its top line despite reporting widening losses due to one time exceptional expenses in Q3. While the company’s revenue from operations surged 41% YoY to INR 113.98 Cr, net loss also jumped 145% to INR 48.03 Cr.

The company’s total userbase also surged nearly 30% to just under 3.50 Lakh with an average monthly transacting truck operator running 7.35 Lakh trucks using BlackBuck’s tolling and vehicle tracking solutions.

Now, the logistics major is anticipating windfall gains in revenues in the upcoming quarters from ‘FasTag Program management fee’ along with scaling its new business verticals Telematics and fuel sensor business. JM Financial recommends a buy rating for the stock and projects a price target of INR 570 by March 2026.

Interview: Razorpay’s IPO Playbook

Inc42: The redomiciling is one step to prepare for an IPO. But you also had to adjust in other ways. What was that like?

Harshil Mathur: The first thing to understand is that an IPO is not just a one-day event. It’s a long-term commitment. The actual listing happens in a day, but once you go public, you’re a public company for the long run.

A common mistake founders make is focusing too much on the listing day, by trying to get the best possible stock price at launch. If you look at India’s tech IPO history, companies that optimised for short-term listing gains haven’t done well in the long run.

The ones that succeeded were those that prepared themselves to deliver steady, long-term results for shareholders.

See the full story — part of the Griffin Dialogues series

IPO Watch 

• Urban Company’s New Avatar: With an IPO on its horizon, Gurugram-based Urban Company has converted itself into a public entity and is likely to submit the draft papers for an INR 3,000 Cr IPO before the end of FY25
• Zetwerk’s Pre-IPO Raise: Ahead of a 2025 IPO, manufacturing unicorn Zetwerk is in talks to raise $25 Mn to $30 Mn from Indian family offices and high-net-worth individuals (HNIs). Zetwerk is also close to filing for a $500 Mn IPO this year
• Zepto Gears Up: Zepto is reportedly looking to bring mutual funds on board to facilitate sale of shares worth $300 Mn ahead of an IPO. The quick commerce startup is eyeing a pre-IPO round of $300 Mn later this year
• Flipkart’s IPO Gameplan: The ecommerce giant  is looking to expand its base in Gurugram in what seems to be a strategic move in the run up to its mega IPO. As Flipkart is looking to position itself as a homegrown company, it also needs to accelerate efforts to achieve profitability target