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Time of India
3 days ago
- Business
- Time of India
Swiggy may recover quick commerce share despite widening losses: Morgan Stanley
Brokerage house Morgan Stanley believes online food and grocery delivery company Swiggy 's quick commerce business has a bright future. This is despite the fact that while quick commerce has helped drive Swiggy 's revenue growth, the company's expenditure on the vertical continues to drag its bottom line down. Instamart , Swiggy's quick delivery business, saw its gross order value (GOV) rise 101 per cent year-on-year to Rs 4,670 crore. However, the adjusted Ebitda loss also increased to Rs 840 crore during the same period. Nevertheless, Morgan Stanley said in a recent note that Swiggy is well-equipped to weather the rising competition in the quick commerce segment with enough balance sheet strength to continue investing in the vertical. Initiating coverage on Swiggy shares, Morgan Stanley analysts Gaurav Rateria, Sulabh Govila and Sakshi Rana stated in the June 2 note that medium-term concerns about competition in quick commerce will persist. Multiple new players, including major ecommerce companies, are now entering the industry. Even so, Swiggy will be able to protect its relative market share, the analysts noted. Morgan Stanley has revised its estimates for quick commerce's total addressable market—representing the entire potential demand—upwards to USD 57 billion by 2030, from USD 42 billion earlier. The brokerage expects 150 Indian cities to be conducive to the service, compared to the top 30 cities now. This implies multifold growth in the USD 8 billion market seen at the end of March 2025. Existing companies with investments in infrastructure will benefit more from the quick commerce upsurge, the Morgan Stanley note read, and Swiggy has invested heavily in the space over the past 12 months. The company met its target of 1,000 dark stores, adding 316 of these micro-warehouses in the March quarter, and is looking to expand the network. "We believe that store additions will be a derivative of growth... we have made a choice of network where we have these megapods, which are two-and-a-half times larger than dark stores and these can do 5,000-6,000 orders per day compared to 2,000-3,000 orders a day (done by smaller dark stores)," Swiggy's chief financial officer Rahul Bothra had told ET after the March quarter results in May. Swiggy's current balance sheet strength and profit in food delivery will allow it to continue quick commerce investments and focus on at least maintaining market share, Morgan Stanley said. Total cumulative investment, in the form of operating losses or cash burn, in its quick commerce vertical is expected to be over USD 1.2 billion over the next two to three years before the company reaches break-even at the adjusted Ebitda level, the brokerage house said. Swiggy shares rose as much as 9.5 percent during trade today to Rs 365 apiece. The counter closed 8.73 percent higher at Rs 362.50 per share, against a 0.32 percent rise in the Sensex to 80,998.25.
Time of India
4 days ago
- Business
- Time of India
Swiggy may recover quick commerce share despite widening losses: Morgan Stanley
Brokerage house Morgan Stanley believes online food and grocery delivery company Swiggy 's quick commerce business has a bright future. This is despite the fact that while quick commerce has helped drive Swiggy 's revenue growth, the company's expenditure on the vertical continues to drag its bottom line down. Instamart , Swiggy's quick delivery business, saw its gross order value (GOV) rise 101% year-on-year to Rs 4,670 crore. However, the adjusted Ebitda loss also increased to Rs 840 crore during the same period. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Anvisa aprova solução para ajudar a reduzir gordura visceral da barriga em 7 dias! Você Mais Saudável Hoje Saiba Mais Undo Nevertheless, Morgan Stanley said in a recent note that Swiggy is well-equipped to weather the rising competition in the quick commerce segment with enough balance sheet strength to continue investing in the vertical. Initiating coverage on Swiggy shares, Morgan Stanley analysts Gaurav Rateria, Sulabh Govila and Sakshi Rana stated in the June 2 note that medium-term concerns about competition in quick commerce will persist. Live Events Multiple new players, including major ecommerce companies, are now entering the industry. Even so, Swiggy will be able to protect its relative market share, the analysts noted. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Morgan Stanley has revised its estimates for quick commerce's total addressable market—representing the entire potential demand—upwards to $57 billion by 2030, from $42 billion earlier. The brokerage expects 150 Indian cities to be conducive to the service, compared to the top 30 cities now. This implies multifold growth in the $8 billion market seen at the end of March 2025. Existing companies with investments in infrastructure will benefit more from the quick commerce upsurge, the Morgan Stanley note read, and Swiggy has invested heavily in the space over the past 12 months. The company met its target of 1,000 dark stores, adding 316 of these micro-warehouses in the March quarter, and is looking to expand the network. "We believe that store additions will be a derivative of growth... we have made a choice of network where we have these megapods, which are two-and-a-half times larger than dark stores and these can do 5,000-6,000 orders per day compared to 2,000-3,000 orders a day (done by smaller dark stores)," Swiggy's chief financial officer Rahul Bothra had told ET after the March quarter results in May. Swiggy's current balance sheet strength and profit in food delivery will allow it to continue quick commerce investments and focus on at least maintaining market share, Morgan Stanley said. Total cumulative investment, in the form of operating losses or cash burn, in its quick commerce vertical is expected to be over $1.2 billion over the next two to three years before the company reaches break-even at the adjusted Ebitda level, the brokerage house said. Swiggy shares rose as much as 9.5% during trade today to Rs 365 apiece. The counter closed 8.73% higher at Rs 362.50 per share, against a 0.32% rise in the Sensex to 80,998.25.
