Swiggy’s stock experienced a fluctuating day on the market, initially opening 1% lower at ₹328.80 before making a notable recovery, eventually climbing 1.3% to reach ₹336.45. This rebound followed the company’s receipt of a significant ₹158 crore tax order from the Income Tax Department in Bangalore, issued after the markets had closed on April 1. The tax authority’s order claims that certain cancellation charges paid to merchants are not permissible as deductions under the Income Tax Act.

Tax Compliance Issues

In addition to the cancellation charge dispute, Swiggy is facing another compliance challenge. The company has reportedly not accounted for interest income derived from its income tax refund, which adds to the scrutiny of its tax filings.

• The order, as detailed in a recent exchange filing, pertains to the fiscal year running from April 2021 to March 2022.
• The Deputy Commissioner of Income Tax, Central Circle – 1(1), Bangalore, issued the assessment, leading to an adjustment of ₹158,25,80,987 (approximately ₹158 crore).

Despite the severity of the tax order, Swiggy asserts that it will not significantly affect its financial health or operational capabilities. The company plans to contest this ruling, citing robust grounds for appeal. "We believe we hold strong arguments against the Order and are proceeding with the necessary steps to protect our interests," the company stated in its filing.

Financial Performance Overview

Looking at Swiggy’s financial performance, the company reported an increase in consolidated losses, which expanded to ₹799 crore in Q3 FY25, compared to ₹574 crore during the same quarter of the previous fiscal year. However, its revenue from operations showed a positive trend, rising to ₹3,993 crore for the quarter ending in December FY25, marking a 31% year-on-year increase.

Stock Market Trends

Over the past five trading sessions, Swiggy’s share price has seen a 0.80% decline, while it managed a 1.46% return over the past month. Nonetheless, the company’s stock value has plummeted by over 27% since its debut on the stock exchanges in November 2024.

In comparison, the benchmark Nifty 50 index has faced its challenges, declining by more than 2% in the last week but showing an uptick of 4.7% over the past month. The Nifty index has seen a slight dip of 1.67% since November 2024.

In summary, while Swiggy navigates tax compliance hurdles and fluctuating stock performance, it remains focused on appealing the Income Tax order and maintaining its growth trajectory in a competitive market landscape.