Why is Swiggy falling/rising?

Recent Price Movement and Market Performance

Swiggy’s stock has demonstrated a strong short-term rally, gaining 5.71% over the past week compared to the Sensex’s decline of 0.52%. Over the last month, the stock also outperformed the benchmark, rising 5.32% against the Sensex’s modest 0.95% gain. This recent momentum is underscored by the stock’s consecutive two-day gains, delivering a 5.09% return in that period. On 12-Dec, the share price touched an intraday high of ₹421.60, marking a 5.06% increase from previous levels.

Technical indicators support this positive trend, with Swiggy trading above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. Such positioning often signals bullish sentiment among traders and investors, suggesting confidence in the stock’s near-term prospects.

Investor Participation and Liquidity

Investor interest has notably intensified, as evidenced by a sharp rise in delivery volume. On 11-Dec, the delivery volume surged to 87.26 lakh shares, a 161.06% increase compared to the five-day average. This heightened activity indicates growing participation from market players, which has contributed to the stock’s liquidity and ability to sustain larger trade sizes, with a trading capacity of approximately ₹7.31 crore based on 2% of the five-day average traded value.

Institutional Confidence Amidst Operational Challenges

One of the key drivers behind the recent price appreciation is the increased stake held by institutional investors, which now stands at 28.19%. These investors, equipped with superior analytical resources, have raised their holdings by 7.28% over the previous quarter. Their growing confidence often signals a positive outlook on the company’s potential, even when short-term financials remain under pressure.

However, it is important to balance this optimism with the company’s fundamental challenges. Swiggy continues to report operating losses, reflected in a weak EBIT to interest ratio averaging -30.85, indicating difficulties in servicing debt. The company’s recent quarterly results for September 2025 showed flat performance, with a debtor turnover ratio at a low 0.65 times and profit before tax (excluding other income) declining by 12.3% to a loss of ₹1,151 crore. Net losses after tax also worsened by 17.9%, amounting to ₹1,092 crore.

Long-Term Underperformance and Risk Factors

Despite the recent rally, Swiggy’s stock has underperformed significantly over longer time horizons. Year-to-date, the stock has fallen 22.92%, contrasting sharply with the Sensex’s 9.12% gain. Over the past year, the stock declined 17.41% while the benchmark rose 4.89%. The company’s profits have contracted by 34% in the same period, highlighting ongoing operational difficulties. Furthermore, Swiggy has consistently lagged behind the BSE500 index in each of the last three annual periods, underscoring persistent challenges in delivering shareholder value.

Conclusion: Short-Term Gains Amid Structural Weakness

Swiggy’s recent price rise on 12-Dec is primarily driven by increased investor participation, strong institutional buying, and positive technical signals. The stock’s outperformance relative to the Sensex and its sector over the past week and month reflects renewed market interest. However, these gains come against a backdrop of significant operational losses, weak debt servicing ability, and consistent underperformance over longer periods. Investors should weigh the short-term momentum against the company’s fundamental challenges before making investment decisions.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →