New Delhi, 23 April (IANS). Swiggi Limited has received a ‘SAIL’ rating for the first time since the listing in November 2024. Analysts have expressed concern about the deteriorating situation of Swiggy in both ‘food delivery’ and ‘Quick Commerce’.
According to a new report by Ambit Capital, Swiggi has lost its initial lead in these sectors and is now second in food delivery and third in Quick Commerce.
Ambit Capital started Swiggy’s coverage with a cautious approach and set a target price of Rs 310 per share. This indicates a possible decline of more than 20 percent from the company’s last business value.
The report said that Swiggy is now behind its competitive Jomato in the Food delivery segment. Jomato has a big access, more users and order volume is also high.
Swiggy’s market share has slowed down the pace of decline, but Ambit feels that its share will come to about 42 percent in a long time.
Swiggy’s Quick Commerce Service, Instamart is also facing difficulties.
Instamart, the biggest company in this segment, is now lagged behind both Blinkit and Jepto.
Ambit reported that the adresable market of Instamart is limited to only 30 to 50 cities.
Embit also criticized Swigy’s highly dependent on the advertising revenue and reduce the competition.
The report states that Instamart needs to invest to overtake rivals in many areas. These fields are product variety, store efficiency, customer acquisition and advertising access.
However, JP Morgan has recently informed that Swiggy is increasing the number of its stores and is gradually reaching equal to Jepto, but the ambit is more cautious.
The delegation of the 10–15 min delivery by Instamart to the delayed response to the Industry trend is also a major reason for its decline.
While competitive Blinkit and Jepto initially focused on fast delivery speed. Swiggy initially worked on a 30 -minute delivery model.
Apart from this, it also faced small product range and slow marketing efforts.
The report said that Swiggi is now facing strict competition on all fronts.
-IANS
SKT/ABM
