Swiggy, the prominent food delivery platform that made its stock market debut in November 2024, has reported a consolidated net loss of Rs 625.5 crore for the September quarter (Q2FY25), showing a slight improvement from the Rs 657 crore loss incurred during the same period last year. Despite these losses, the company's financial performance reflects significant growth and progress in several critical areas, indicating that Swiggy is gradually moving toward profitability.
In terms of revenue, Swiggy saw a notable 30% year-on-year (YoY) increase, bringing in Rs 3,601 crore, up from Rs 2,763 crore in Q2FY24. However, sequentially, the company's loss widened compared to the previous quarter (Q1FY25), which stood at Rs 611 crore. This highlights that while Swiggy is experiencing positive growth trends, it is still grappling with the inherent challenges faced by its business model, especially in the highly competitive food delivery and quick commerce sectors.
A key highlight for Swiggy during this period was the 30% YoY growth in its gross order value (GOV), which rose to Rs 11,306 crore. The company also experienced a 19.2% YoY increase in its platform’s average monthly transacting users (MTUs), reaching 17.1 million. This surge in user engagement reflects Swiggy's strong market position and the increasing reliance of consumers on its platform for food delivery and other services.
The company's operational improvements were evident in its adjusted EBITDA loss, which reduced by 30% YoY, dropping to Rs 341 crore. This indicates that Swiggy has been effective in enhancing its operational efficiency, even as it continues to operate at a loss. Among the various segments of Swiggy’s business, the food delivery division showed the most notable improvements. It achieved near-doubling profitability with an adjusted EBITDA of Rs 112 crore, reflecting a 1.6% margin. The GOV for food delivery grew by 5.6% on a quarter-on-quarter (QoQ) basis, rising to Rs 7,191 crore, which highlights the continued demand for food delivery services despite the competitive environment.
Swiggy’s quick commerce arm, Swiggy Instamart, also demonstrated strong performance, with a significant 24% QoQ growth in GOV, reaching Rs 3,382 crore. The number of orders on Instamart grew by 21% QoQ, and the platform’s contribution margins improved by 124 basis points to -1.9%. This improvement is a clear indication that Swiggy’s quick commerce vertical, which provides ultra-fast deliveries of groceries and essentials, is steadily moving towards profitability. Furthermore, Instamart expanded significantly during the quarter, adding 12 new cities and 52 stores, and the company plans to double its dark store count by March 2025. This rapid expansion demonstrates Swiggy’s confidence in the long-term potential of its quick commerce business.
In line with its efforts to offer faster and more convenient services, Swiggy recently launched Bolt, a 10-minute restaurant delivery service. This service has quickly gained popularity, now accounting for 5% of all food deliveries on the platform. The launch of Bolt underscores Swiggy's commitment to innovating and meeting the evolving demands of its urban consumer base, who increasingly prioritize speed and convenience in their food delivery experiences. CEO Sriharsha Majety emphasized that Swiggy is focused on understanding and responding to consumer behavior to make urban households’ lives more convenient.
Swiggy’s growth is not limited to just food delivery and quick commerce. The company is also strategically investing in its logistics capabilities. Its board approved an investment of Rs 1,600 crore in its logistics arm, Scootsy Logistics, a move that will be partially funded through the proceeds from its IPO. This investment aims to strengthen Swiggy’s infrastructure, optimize its operations, and expand its reach. Additionally, Swiggy has allocated Rs 250 crore for working capital infusion, which will support the company’s day-to-day operations and help it maintain liquidity as it continues its growth journey.
Moreover, Swiggy is diversifying its business model by venturing into the sports and entertainment sectors. The company announced plans to set up a subsidiary focused on sports team ownership and event management. This marks a bold new direction for Swiggy, as it seeks to tap into the lucrative and fast-growing sports market. This diversification will help Swiggy reduce its dependency on food delivery and quick commerce, exploring new revenue streams and strengthening its brand presence in different sectors.
Overall, while Swiggy is still navigating through losses, its robust growth in key metrics such as revenue, GOV, MTUs, and operational efficiency shows that the company is on the right track. With continuous innovation, expansion in its quick commerce business, significant investments in logistics, and a move into new sectors like sports and entertainment, Swiggy is positioning itself for future growth and success. The company’s ability to respond to shifting consumer behavior and market demands, while exploring new revenue streams, could play a pivotal role in its journey toward profitability in the coming years.
