Swiggy Shares Slide After JM Financial Cuts Rating Amid Cash Burn Concerns

Swiggy’s shares dropped over 2% on Monday after brokerage firm JM Financial cut its rating on the food delivery and quick-commerce company to 'Reduce' from 'Hold.' 

The brokerage also cut its price target to ₹440 from ₹460 earlier, due to a worsening balance sheet and intensifying competition.

Brokerage Concerns

JM Financial said Swiggy’s net cash balance has been shrinking at a rapid pace, falling from ₹8,130 crore in December 2024 to an estimated ₹4,350 crore by September 2025, excluding potential proceeds from a stake sale. 

The firm noted that despite Instamart’s over 100% year-on-year growth in gross order value, it has been losing market share to Blinkit, which grew more than 130% and plans to double its store base.

The brokerage highlighted that Swiggy’s pace of dark store expansion has slowed sharply to 40–50 per quarter, compared to a peak of 316 in the fourth quarter. This, it warned, risks Instamart “meaningfully falling behind” rivals like Blinkit, Zepto, and new entrants Flipkart Minutes and Amazon Now.

Rapido Stake Sale Reports

The downgrade comes alongside media reports that Swiggy may sell its roughly 12% stake in Rapido to raise capital. 

JM Financial, however, believes the sale could fetch at most $320 million (₹2,900 crore), far short of the over $500 million war chest the brokerage thinks Swiggy requires to support its long-term ambitions in quick commerce.

Cash Burn Outlook

Swiggy has reported widening losses for five straight quarters, with cumulative losses crossing ₹6,600 crore over the last nine quarters. 

JM Financial expects cash outflows to remain high until at least FY27, even if Instamart breaks even on contribution margins, citing muted store additions and continued competitive intensity.

What Is The Retail Mood?

On Stocktwits, retail sentiment was ‘bearish’ amid ‘normal’ message volume.

Swiggy’s stock has declined 17.4% so far in 2025.

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