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Shares of Zomato Ltd. and its peer Swiggy Ltd. tumbled on Tuesday after the earnings commentary from India’s biggest food-delivery company amplified concerns about intensifying competition in the quick-commerce space.

Zomato tumbled almost 11% to a six-month low after warning of further losses in its sub-10 minute delivery business and reporting a 57% drop in quarterly profit. The disappointing results also dragged down Swiggy’s shares, which plunged by a record 8%.

After shaking up the market for daily essentials, rapid commerce firms have been fighting it out in categories including electronics, apparel, and general merchandise. Zomato-owned Blinkit’s entry into this space was followed by Swiggy and privately-held Zepto. The mounting competition has prompted players to spend more on opening new delivery stores, eroding margins.

“The path to break-even for the quick commerce segment is going to be much longer,” Bloomberg Intelligence analyst Nathan Naidu said. “It’s a cut-throat time.”

With Tuesday’s selloff, Zomato’s shares have slipped over 20% so far this year. The slide follows more than four-fold surge during the previous two years. In November, Zomato raised $1 billion via an institutional share placement to expand offerings of its Blinkit business.

While the company retained its goal of growing its food delivery business at 20% annually, it offered a cautious outlook for the near term.

“As we continue to bring forward store expansion, our networks may have to carry a greater load of under-utilized stores which will impact near-term profits in the next one or two quarters,” the company said in a statement just before the close of trading on Monday.

(Updates with analyst’s comment in fourth paragraph)

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