Swiggy’s Q2 Loss Narrows 5% YoY To INR 625 Cr

Foodtech major Swiggy trimmed its consolidated net loss by 4.78% to INR 625.53 Cr in the September quarter (Q2) of the financial year 2024-25 (FY25) from INR 657 Cr in the year-ago quarter. 

On a sequential basis, the loss increased 2.32% from INR 611 Cr.

Operating revenue zoomed 30% to INR 3,601.45 Cr during the quarter under review from INR 2,763.33 Cr in the year-ago period. On a sequential basis, it rose 12% from INR 3,222.21 Cr. 

In a statement, the company said that its consolidated adjusted EBITDA loss declined 30% year-on-year (YoY) to INR 341 Cr in Q2 FY25. Overall gross order value (GOV) grew 30 % YoY to INR 11,306 Cr during the quarter under review.

The company attributed the lower decline in net loss to higher ESOP charges, which stood at INR 278 Cr during the quarter under review as against INR 187 Cr in the year-ago quarter.

Swiggy’s monthly transacting users (MTU) across its food delivery service, quick commerce arm Swiggy Instamart and its Out of Home Consumption vertical grew 19.2% YoY to 1.71 Mn.

“At the platform level, we’ve seen one of our best quarters so far with strong growth in GOV, while consistently reducing the losses. With well-spread-out businesses in different stages of profitability, we’re excited by the value Swiggy will be able to bring to consumers, our ecosystem and shareholders,” the statement added. 

This marked the first financial disclosure for Swiggy since it became a public entity. The foodtech major made its debut on the bourses on November 13, listing at INR 412 on the BSE. This was a premium of almost 6% to the issue price. 

Since its listing, the share prices of the foodtech major have risen about 25%. 

It is pertinent to highlight that Swiggy’s rival Zomato posted a net profit of INR 176 Cr in Q2 FY25. 

In its shareholder letter, Swiggy said it expects to attain profitability at consolidated adjusted EBITDA level by Q3 FY26 (October-December 2025). Given the company’s bread-and-butter food delivery business has been EBITDA positive, the group level profitability depends on its ability to attain positive unit economics for its other arms. 

Let’s take a look at how Swiggy’s different verticals fared in the September quarter:

Food Delivery

Swiggy’s staple food delivery business brought in a revenue of INR 1,808 Cr in the quarter, up about 18% from INR 1,535 Cr in the year-ago quarter. The increase came on the back of about 15% YoY growth in food delivery gross order value (GOV) to INR 7,191 Cr.

The company realised a profit of INR 121.93 Cr from its food deliveries in the quarter as against a loss of INR 43.78 Cr in the year-ago period. 

While this vertical turned positive on an adjusted EBITDA basis in Q3 FY24, Swiggy doubled down on its food delivery margin in the quarter. The adjusted EBITDA margin of the business stood at 1.6%. 

Moving forward, the company is looking to deliver sustainable adjusted EBITDA margins in this segment. “We expect our food delivery business to deliver sustainable adjusted EBITDA margins of ~5% in the medium term. This will be delivered through increased monetisation led by advertising, optimisation in other variable costs and operating leverage,” Swiggy said. 

The company also said that ‘Bolt’, which provides food delivery in 10 minutes, now accounts for about 5% of the food delivery orders within eight weeks of its launch.

Quick Commerce

While Swiggy Instamart continued to be a loss making venture, the company saw a surge in revenue. In Q2 FY25, Instamart’s adjusted revenue stood at INR 513 Cr, up 114% from INR 240 Cr in the year-ago quarter. Its GOV zoomed 76% YoY to INR 3,382 Cr.

Instamart also saw a slight reduction in its loss in the quarter. Swiggy incurred a loss of INR 317.25 Cr from the vertical, down 0.7% from INR 319.61 Cr in the year-ago period. 

Swiggy said that the quick commerce business is still in an investment phase and it will earmark specific investments to sustain long term profitable growth. 

Swiggy is expecting Instamart to be contribution break-even by Q3 FY26 and adjusted EBITDA breakeven by Q2 FY27. 

Moving forward, Swiggy plans to expand its 10-minute deliveries service by doubling its dark store count by March 2025 from the 523 dark stores it operated in March 2024. Further, it also plans to increase the size of its stores by 30-35%, replacing some of its existing older, small-format stores (2,500-2,800 sq ft) with larger stores (3,500-4,500 sq ft) that can house up to 20,000 SKUs. 

Swiggy Instamart is also in the process of rolling out large 8,000-10,000 sq ft dark stores, called ‘Megapods’. These stores will be able to house over 50,000 SKUs and are set to launch in select pincodes.

“Consumers in many pincodes of Bangalore already enjoy the wider selection by getting their most frequently used items in 10 minutes and the extended assortment in 10 to 30 mins through a single order basket, seamlessly fulfilled on a split-cart-basis,” Swiggy said.

Out Of Home Consumption

This vertical, which comprises exclusive events and experiences business Swiggy SteppinOut and restaurant reservations and booking platform Dineout, is close to achieving adjusted EBITDA profitability. 

Swiggy expects it to achieve adjusted EBITDA break-even in the ongoing fiscal year.

Swiggy made INR 60 Cr in revenue from the Out of Home Consumption vertical, up 71% from INR 35 Cr in the year-ago period. Its loss declined 79% to INR 9.26 Cr from INR 44.34 Cr in Q2 FY24. Its adjusted EBITDA margin as a percentage of its GOV stood at -1.3% during the quarter under review as against -8.8% in the year-ago quarter. 

“Swiggy Dineout is one of the very selective and strategic acquisitions we have made in our history; and the integration of Dineout on our unified app has demonstrated the power of our one-app play. Within 2 years of acquisition and integration, Dineout today boasts of nearly 35K active and 65K listed restaurants. A 46% YoY GOV growth in Q2FY25 has taken the business to within striking distance of breaking even, with adjusted EBITDA margins at -1.3%,” Majety said. 

Supply Chain & Distribution

Under this vertical, Swiggy provides a comprehensive supply chain solutions for wholesalers, retailers and Kiranas, including warehouse management, in-warehouse processing, order fulfilment and logistics services. 

Swiggy acquired Lynks Logistics in 2023 to expand this offering. It claimed that its customer base for the service expanded to over 1 Lakh unique customers, up 15.6% quarter-on-quarter (QoQ). The vertical’s revenue stood at INR 1,453 Cr in the quarter under review, up 22% from INR 1,190 Cr in Q2 FY24. 

“We have made the necessary supply chain and warehousing investments over the last few quarters and expect the overall profitability to improve sequentially with better utilisation and operating leverage kicking in,” the company said. 

Where Did Swiggy Spend?

Swiggy’s expenses jumped 20% to INR 4,309.55 Cr in Q2 FY25 from INR 3,596.63 Cr in Q2 FY24. Sequentially, it rose 10% from INR 3,907.96 Cr. 

On the increasing expenses, Swiggy’s CEO said, “This business (quick commerce) is witnessing heightened degree of competitive action. This means that we will need to be agile and responsive to the market movements and modulate our investments towards long term health of the business for sustainable GOV growth. Our  investments (including marketing spends) will be aimed at driving user growth, frequency and wallet share with continuous hyper-local and geographical store expansion.”

Purchase Of Stock In Trade: This was the biggest expense for Swiggy in the quarter. The company spent INR 1,383.81 Cr under the head, up 23% from INR 1,128.21 Cr in the year-ago quarter. 

Delivery & Related Charges: The company spent INR 1,094.85 Cr on deliveries in the quarter, up 33% YoY.

Employee Benefits: Swiggy spent INR 607.29 CR on its employees in the quarter, up 13% YoY. 

Promotional Expenses: Swiggy spent INR 537.12 Cr on ads and sales promotion in the quarter, up 9% YoY.

ESOP Expenses: While ESOP costs surged nearly 50% YoY to INR 278 Cr in Q2 FY25, the company said it expects ESOP expenses to jump 92% YoY to INR 1,147 Cr in FY25. However, the number would decline every year after this, it added.

Meanwhile, Swiggy’s board also approved setting up a new wholly owned subsidiary to house its ‘Team Mumbai’ in the World Pickleball League. The board also approved an investment of up to INR 1,600 Cr in its wholly owned subsidiary Scootsy Logistics.

Shares of Swiggy ended Tuesday’s (December 3) trading session 1.2% higher at INR 501.30 on the BSE.

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