Swiggy shares crack 27% YTD. What's behind the fall and should you stay invested?
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Shares of food delivery major Swiggy have declined 26.75% year-to-date, weighed down by back-to-back weak quarterly results and sustained losses despite solid revenue growth.The stock has taken a sharp fall, reflecting investor concerns over profitability, aggressive spending, and rising operational costs. Although the stock has recovered partially since then, it continues to trade below key resistance levels.In Q1FY26, Swiggy reported a net loss of Rs 1,197 crore, compared to Rs 611 crore in the year-ago period. Revenue rose 54% year-on-year to Rs 4,961 crore, but total expenses surged 60% to Rs 6,244 crore, led by higher delivery-related costs (Rs 1,313 crore), advertising spends (Rs 1,036 crore), employee benefits, and logistics costs in the quick commerce segment.The results followed a disappointing Q4FY25, where the company had posted a net loss of Rs 1,081 crore, nearly double the Rs 554 crore loss in the same quarter last year, despite a 45% increase in revenue to Rs 4,410 crore.Swiggy's management attributed the higher losses to scale-driven expansion across verticals, reiterating its long-term focus on sustainable profitability. CEO Sriharsha Majety said the company's 'continued investments aligned to its vision of creating convenience at scale.'Despite the weak earnings, technical analysts are witnessing signs of recovery.Shitij Gandhi, Sr. Research Analyst (Technicals) at SMC Global Securities , noted that Swiggy has rallied approximately 20–26% from its lows and is currently trading in a consolidation range of Rs 375 to Rs 430.He added that the stock is now approaching its 200-day Exponential Moving Average (EMA) on the weekly charts, located between Rs 420 and Rs 425.'A sustained breakout above this level could open the door for further upside toward the Rs 450–Rs 470 zone,' Gandhi said, cautioning that a failure to break this resistance, coupled with a slip below Rs 370, may trigger renewed selling pressure.Mandar Bhojane, Senior Equity Research Analyst at Choice Broking, offered a similarly constructive view, stating that 'Swiggy is currently trading at Rs 396 and is consistently forming higher highs and higher lows, indicating a strong uptrend.'He added that the stock is taking support from all key EMAs — 20, 50, and 100 — and that 'if the stock manages to close and sustain above Rs 400, it has the potential to rally towards Rs 440 and Rs 480 levels.'Bhojane also pointed to improving technical indicators, noting that 'the RSI is at 51.25 and trending upward' and that 'the Stochastic RSI is in the oversold region and showing a positive crossover.'He recommended using Rs 375 as a stoploss and considered any dip near Rs 385 a buying opportunity.While Swiggy continues to face challenges on the profitability front due to its investment-heavy growth strategy, the stock has shown early signs of technical strength.For now, analysts advise investors to monitor key levels, particularly the Rs 420–Rs 425 zone, which could determine whether the recent recovery turns into a more sustained uptrend.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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