SWIGGY - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.2

🍽️ Swiggy shows strong market presence and improving loss metrics, but negative returns, lack of profitability, and high burn rate suggest caution for long-term investors.

📈 Positive

• 📉 Low Leverage: Debt-to-equity ratio of 0.01 reflects a clean balance sheet and minimal financial risk.
• 📈 Institutional Confidence: FII holdings increased by 4.87% and DII by 2.42%, indicating growing investor interest.
• 📊 Loss Reduction: PAT improved from -₹991 Cr. to -₹881 Cr., showing signs of operational efficiency.
• 📈 Technical Support: Trading near 200 DMA with RSI at 43.4 suggests potential for consolidation.
• 📦 Business Model: Dominant player in food delivery and quick commerce with strong brand recall and logistics infrastructure.

⚠️ Limitation

• 📉 Negative Returns: ROCE of -23.3% and ROE of -91.9% indicate poor capital efficiency.
• 📉 No Profitability: EPS of -₹14.4 and lack of P/E ratio reflect ongoing losses.
• 📉 No Dividend: Dividend yield of 0.00% offers no passive income.
• 📉 High Burn Rate: Continued losses raise concerns over sustainability without external funding.
• 📉 Weak Book Value: ₹48.2 compared to market price of ₹410 suggests overvaluation.

📉 Company Negative News

• Quarterly losses remain high despite slight improvement.
• Stock down 33% from 52-week high, reflecting valuation compression.

📈 Company Positive News

• Strong growth in quick commerce and subscription services.
• Operational efficiency improving with reduced quarterly losses.
• Investor interest rising with increased institutional holdings.

🏭 Industry

• Food delivery and quick commerce sectors benefit from urbanization, convenience demand, and digital adoption.
• Industry P/E of 38.3 reflects growth optimism despite profitability challenges.
• Peers include Zomato, Blinkit, and Dunzo.

🧾 Conclusion

• 📉 Entry Zone: ₹380–₹400 could be a speculative accumulation range based on technical support.
• 📈 Long-Term View: Hold with caution; monitor path to profitability and unit economics.
• 🔍 Valuation Watch: Wait for consistent earnings and margin improvement before aggressive accumulation.