SWIGGY - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | SWIGGY | Market Cap | 86,394 Cr. | Current Price | 314 ₹ | High / Low | 474 ₹ |
| Book Value | 43.5 ₹ | Dividend Yield | 0.00 % | ROCE | -23.3 % | ROE | -91.9 % |
| Face Value | 1.00 ₹ | DMA 50 | 365 ₹ | DMA 200 | 393 ₹ | Chg in FII Hold | 3.84 % |
| Chg in DII Hold | 6.59 % | PAT Qtr | -886 Cr. | PAT Prev Qtr | -881 Cr. | RSI | 32.2 |
| MACD | -18.9 | Volume | 98,13,471 | Avg Vol 1Wk | 1,79,92,705 | Low price | 297 ₹ |
| High price | 474 ₹ | Debt to equity | 0.01 | 52w Index | 9.80 % | Qtr Profit Var | -40.4 % |
| EPS | -14.8 ₹ | Industry PE | 48.9 |
💰 Financials: Swiggy shows weak fundamentals with ROE at -91.9% and ROCE at -23.3%, reflecting poor efficiency and negative returns. Debt-to-equity ratio of 0.01 highlights a virtually debt-free balance sheet, but profitability remains a major concern. Quarterly PAT stood at -₹886 Cr., continuing losses from the previous quarter (-₹881 Cr.). Cash flows remain under pressure due to high operating costs and competitive intensity in the food delivery sector.
📊 Valuation: The company currently has no meaningful P/E ratio due to negative earnings. P/B ratio (~7.2) is high relative to book value of ₹43.5, suggesting expensive pricing. PEG ratio is not applicable given negative earnings growth. Intrinsic value analysis suggests the stock is overvalued relative to its fundamentals, though investor optimism is driven by growth potential in the food-tech industry.
🍴 Business Model & Competitive Advantage: Swiggy operates as a leading food delivery and quick-commerce platform in India. Its competitive advantage lies in scale, brand recognition, and diversified offerings (Instamart, Genie, and restaurant partnerships). However, profitability challenges, high customer acquisition costs, and intense competition from Zomato and other players limit financial health.
📈 Entry Zone: Considering DMA 50 (₹365) and DMA 200 (₹393), accumulation is only attractive if the price dips below ₹300–₹310. Long-term investors should be cautious, as sustained losses and stretched valuations pose risks despite strong market presence.
Positive
- Virtually debt-free balance sheet (Debt-to-equity 0.01).
- Strong brand recognition and market leadership in food delivery.
- Diversified offerings including Instamart and Genie.
- Increase in both FII (+3.84%) and DII (+6.59%) holdings shows investor confidence.
Limitation
- Negative ROE (-91.9%) and ROCE (-23.3%) reflect poor efficiency.
- Consistent quarterly losses (PAT -₹886 Cr.).
- High P/B ratio (~7.2) suggests expensive valuation.
- Profitability challenges due to high operating costs and competition.
Company Negative News
- Quarterly losses continue, raising concerns about sustainability.
- Profit variation (-40.4%) highlights worsening financial performance.
Company Positive News
- Increase in institutional holdings (FII +3.84%, DII +6.59%).
- Strong growth in quick-commerce segment (Instamart) supports revenue expansion.
Industry
- Food-tech industry P/E at 48.9 highlights growth optimism, though profitability remains elusive.
- Sector growth driven by rising urban demand and digital adoption.
- Intense competition and thin margins remain key risks.
Conclusion
🔑 Swiggy is a market leader in food delivery and quick-commerce with strong brand equity and investor interest. However, weak fundamentals, sustained losses, and stretched valuations limit near-term attractiveness. Entry only below ₹300–₹310 offers a better risk-reward balance. Long-term holding is risky unless profitability improves significantly and operating efficiency strengthens.
I can also prepare a comparative HTML snapshot against Zomato to highlight Swiggy’s relative strengths and weaknesses in valuation and profitability.