Swiggy , a leading food delivery platform in India, has reported significant growth in orders during recent festive periods, showcasing the increasing popularity of online food delivery services. The company experienced notable spikes in order volumes across various festivals, with particularly impressive numbers during Ashtami.

Ashtami Surge

During Ashtami, Swiggy achieved a remarkable milestone:

• Peak Hour Orders: 2.2 lakh orders received between 8-9 PM
• Year-on-Year Growth: 11.58% increase in overall orders
• Order Value Increase: 17% rise compared to the previous year

This surge coincided with customers breaking their fasts, highlighting the platform's ability to cater to specific cultural and dietary needs during festive occasions.

Navratri Performance

The Navratri period saw a significant demand for traditional fasting foods:

Ganesh Chaturthi Boost

Swiggy also reported impressive numbers during Ganesh Chaturthi:

• Total Modak Orders: 2,28,102
• Daily Order Growth: Tripled from 29,674 to 1,02,045
• Year-on-Year Increase: 35%

Raksha Bandhan Growth

The platform witnessed substantial growth during Raksha Bandhan:

• Overall Order Growth: 32.4%
• Non-Metro Cities Growth: 38.1%

Consistent Growth Across Categories

Throughout the festive season, Swiggy observed double-digit growth in several categories:

• Sweets
• Desserts
• Festive thalis
• Gifting

These figures underscore Swiggy's strong performance during festive periods and its ability to capitalize on increased demand for food delivery services during cultural celebrations. The data also highlights the growing adoption of food delivery platforms, particularly in non-metro cities, and the increasing consumer preference for convenience during festive occasions.

As the food delivery market in India continues to evolve, Swiggy's performance during these peak periods may serve as an indicator of the sector's potential for growth and the changing dynamics of food consumption patterns in the country.

Swiggy , the food delivery giant, has made a strategic move to strengthen its quick-commerce arm, Instamart, by divesting its entire 12% stake in ride-hailing firm Rapido. The sale, valued at Rs 2,400.00 crore, was made to Prosus and Westbridge Capital, more than doubling Swiggy's initial investment of Rs 950.00 crore made in 2022.

Stake Sale and Strategic Implications

The decision to sell comes amidst a challenging market environment, with Swiggy's shares experiencing a significant decline of over 21%. The proceeds from this sale are earmarked for injecting capital into Instamart, Swiggy's loss-making quick-commerce division.

Restructuring Instamart

In a parallel move, Swiggy is restructuring Instamart into a wholly-owned subsidiary. This restructuring could potentially pave the way for a transition to an inventory-led model, signaling a shift in Swiggy's operational strategy for its quick-commerce business.

Mixed Analyst Opinions

The market's reaction to these developments has been mixed, as reflected in varied analyst opinions:

• Nomura maintains a 'Buy' rating with a target price of Rs 550.00, citing Swiggy's adequate financial resources to support Instamart's growth phase.
• JM Financial takes a more cautious stance with a 'Reduce' rating and a target price of Rs 440.00. They view the stake sale as a temporary solution, suggesting that Swiggy may need over $500 million in additional funding.
• Bank of America holds a 'Neutral' position with a target price of Rs 475.00.

Market Performance and Competition

Despite recent share price declines, Swiggy's stock has shown resilience over a longer timeframe, gaining 26% over the past six months. However, short-term weakness is evident, with the stock trading below its 5-day to 30-day moving averages.

Instamart, while experiencing substantial growth of over 100%, faces stiff competition from rival Blinkit. The latter has outpaced Instamart with a 130% growth rate and continues its aggressive expansion strategy. Notably, Instamart's reliance on higher discounting compared to Blinkit raises concerns about potential impacts on margins.

Conclusion

Swiggy's decision to sell its Rapido stake marks a significant strategic shift, aimed at reinforcing its position in the competitive quick-commerce sector. As the company navigates through market challenges and restructures its operations, the effectiveness of these moves in driving Instamart's growth and profitability remains to be seen.