Swiggy shares tumble nearly 8 pc post Q3 numbers

Shares of food delivery and quick commerce major Swiggy, which owns Instamart, on Friday tumbled nearly 8 per cent after the firm reported a widening of its losses for the third quarter ended December at Rs 1,065 crore.

Shares of food delivery and quick commerce major Swiggy, which owns Instamart, on Friday tumbled nearly 8 per cent after the firm reported a widening of its losses for the third quarter ended December at Rs 1,065 crore. The stock tanked 7.68 per cent to Rs 302.25 on the BSE. At the NSE, the stock dropped 7.78 per cent to Rs 302.15. Swiggy on Thursday reported a widening of its losses for the third quarter ended December at Rs 1,065 crore, as losses from the quick commerce segment continued and rising advertising and sales expenditure. The company had reported a loss of Rs 799 crore on a consolidated basis for the corresponding October-December period of the previous financial year. Flagging ''irrational competition'', Swiggy co-Founder and Group CEO Sriharsha Majety said its recent investments into lower consumer-side monetisation have not yielded the desired incremental order-growth, especially at the bottom of the average order value (AOV)-pyramid; and are being reviewed. ''We have consciously chosen not to participate in deep-discount-driven, purely-volume-focussed growth that sacrifices AOVs and margins,'' Majety stated in a letter to shareholders. Overall, Swiggy's quick commerce business Instamart posted a Rs 908 crore loss for the third quarter. Responding to the debate around gigworker delivery deadlines and earnings potential on hyperlocal platforms, Swiggy stated that the quick-delivery model works by reducing the last-mile distance by the dense and apt placement of stores. ''We don't push delivery partners for time-lines, nor penalise them. As our fulfilment-led business takes its point-of-supply closer to the point-of-delivery and customer demand densifies in hyperlocal zones, our last-miles shrink and even batching becomes possible; which allows for our delivery partners to service more orders in their available time. ''As a result, earnings per hour for our delivery partners have consistently continued to increase, led by densification increasing the ability to fulfill more orders in the same available time, as well as a result of inflation (including competition-led, especially during high-demand periods like festivals or low-supply periods like rains),'' Swiggy said in the letter to shareholders.

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