Swiggy Faces First-Ever 'Sell' Rating Amid Market Share Concerns

Swiggy Limited has received its first 'sell' rating since its listing in November 2024, as Ambit Capital raises concerns over the company's declining position in both food delivery and quick commerce services. The brokerage has set a target price of Rs 310 per share, implying a potential drop of over 20 percent from Swiggy's last traded price.  

 

Ambit Capital's report highlights Swiggy's loss of its early lead in the food delivery segment, where it now ranks second behind Zomato. In quick commerce, Swiggy's Instamart has fallen to third place, trailing Blinkit and Zepto. The report attributes these challenges to Swiggy's slower adoption of 10-15 minute delivery models, limited product assortment, and delayed marketing efforts compared to competitors.  

 

Despite these setbacks, Swiggy has been making efforts to catch up, including increasing its store count and scaling operations. However, Ambit remains cautious, noting that Instamart's addressable market is limited to 30-50 cities and requires significant investment to close the gap with rivals.  

 

Market analysts are divided on Swiggy's outlook, with some expressing optimism about its ability to narrow profitability gaps and stabilize market share in the long run. Others, like Ambit, remain skeptical about its competitive positioning and growth prospects.  

 

Source: The Hans India, NDTV Profit, Economic Times.