New Delhi, Jan 30 (PTI) Shares of food delivery and quick commerce major Swiggy, which owns Instamart, on Friday tumbled over 5 per cent after the firm reported a widening of its losses for the third quarter
ended December at Rs 1,065 crore.
The stock declined 4.98 per cent to settle at Rs 311.10 on the BSE. During the day, it tanked 7.71 per cent to Rs 302.15.
At the NSE, the stock edged lower by 5.46 per cent to end at Rs 309.75. Intra-day, it dropped 7.79 per cent to Rs 302.10.
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 advertising and sales expenditure rose.
The company reported a consolidated loss of Rs 799 crore 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 loss of Rs 908 crore for the third quarter.
Responding to the debate over gigworker delivery deadlines and earnings potential on hyperlocal platforms, Swiggy stated that the quick-delivery model works by reducing last-mile distances through strategic placement of stores.
“We don’t push delivery partners for time-lines, nor penalise them. As our fulfilment-led business moves its point of supply closer to the point of delivery and customer demand densifies in hyperlocal zones, our last mile shrinks, and even batching becomes possible, allowing our delivery partners to service more orders within 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. PTI SUM DRR
