Swiggy Shares Plummet Up to 7% Amid Instamart Slowdown, Eateries Rival Eternal Sees 2.5% Dip

Indian Food Delivery Market Experiences Turbulence as Swiggy Shares Plummet

Shares of Swiggy, a leading food delivery major, declined significantly on May 11, with the stock experiencing its worst session in over a month. The decline was largely attributed to slowing growth in its quick-commerce business and intensifying competition from rival companies. Despite narrowing its fourth-quarter loss, Swiggy's shares fell as much as 7%, on track for their biggest intraday percentage drop since April 2. At 10:20 am on May 11, Swiggy shares were trading 4% lower at Rs 268.8 apiece, while shares of its rival Eternal were trading 2.7% lower at Rs 249.42 apiece.

The decline in shares comes on the back of a rise in crude oil prices. Oil prices rallied on Monday, with Brent crude futures climbing $4.16 or 4.11% to $105.45 a barrel at 0340 GMT. U.S. West Texas Intermediate was at $99.80 a barrel, up $4.38, or 4.59%. The global market remained tight due to the ongoing conflict in the Strait of Hormuz, which stayed largely closed.

Investor concerns centered on Swiggy losing quick-commerce market share to rival Eternal's Blinkit, while competition from players such as Zepto, Amazon, and Walmart-backed Flipkart remains intense. Last week, both Brent and U.S. West Texas Intermediate contracts recorded 6% weekly losses on hopes for an imminent end to the 10-week-old conflict that would allow oil transit through the Strait of Hormuz.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

On Friday, Swiggy reported a consolidated loss of Rs 800 crore for the three months ended March 31, compared with Rs 1,065 crore in the previous quarter. The company's growth at its quick-commerce arm Instamart lagged peers, with gross order value rising 68.8%, well below Blinkit's 95.4% increase, suggesting continued market-share losses.

Morgan Stanley noted that while Swiggy's food delivery business recorded its strongest growth in years and margins improved, investor focus remains on execution and profitability in quick commerce amid aggressive competition.