Swiggy’s Q3 Loss Zooms 39% YoY To INR 799 Cr

SUMMARY

Swiggy's bottom line took a hit as expenses surged 32% YoY and 14% QoQ to INR 4,898.3 Cr in Q3 FY25

Operating revenue zoomed nearly 31% YoY to INR 3,993.1 Cr in Q3 FY25

Despite its net losses deepening, the company said that it recorded a higher YoY growth across all three of its B2C verticals

Foodtech major Swiggy’s consolidated net loss rose 39.1% to INR 799 Cr in the third quarter of the ongoing financial year (FY25) from INR 574.4 Cr in the year-ago quarter. Sequentially, loss increased 27.7% from INR 625.5 Cr.

Operating revenue zoomed nearly 31% to INR 3,993.1 Cr during the quarter under review from INR 3,048.6 Cr in Q3 FY24. On a quarter-on-quarter (QoQ) basis, it rose 10.9% from INR 3,601.4 Cr.

Despite the increase in its loss, the company said that it recorded a higher year-on-year (YoY) growth across all three of its B2C verticals – food delivery, Instamart and out-of-home consumption. In its shareholders’ letter, the company said that the average monthly transacting users (MTU) of Swiggy grew 25.3% YoY to 17.8 Mn. 

“We delivered higher YoY growth across all 3 of our primary businesses during Q3, which accelerated B2C GOV growth to 38% YoY. The secular expansion in food delivery margins and cash flow generation is balanced by growth investments being made in quick commerce, including dark stores expansion and marketing, amidst high competitive intensity in the near term,” Swiggy CEO and MD Sriharsha Majety said.

Instamart

The biggest contributor to Swiggy’s net loss this quarter was its quick commerce arm, Instamart. In Q3 FY25, the company’s quick commerce arm raked in a loss of INR 527.68 Cr, up 70% YoY from INR 310.36 Cr. 

In a statement, the company attributed the loss to increase in investments. “Growth investments in quick commerce led to a reduction in contribution margin from -1.9% in Q2FY25 to -4.6% in Q3FY25, as the company ramped up user activation and darkstore expansion across geographies,” it said. 

Meanwhile, Instamart’s revenue jumped 114% YoY and 17% QoQ to INR 576.50 Cr in the quarter. The company said that the vertical’s gross order value (GOV) grew 88% YoY to INR 3,907 Cr. Besides, its average order value (AOV) also increased 14% YoY and 7% QoQ to INR 534 Cr. 

The company added 96 new active dark stores in the quarter, taking its dark store area to 2.45 Mn sq ft. While the company said that Instamart is now available in 84 cities, it claims that it is on track to expand to over 4 Mn sq ft active dark store area by March 2025. This indicates the company’s further plans to invest in its quick commerce play. 

Instamart processed 73 Mn orders in the quarter, up 66% YoY from 44 Mn in the same quarter previous year. The average MTU for the quick commerce arm zoomed 63% YoY to 7 Mn.

Besides, the company also undertook several experiments with its quick commerce play during the quarter. While it launched its 10-minute food delivery app Snacc in the past few months, Majety said that the company is now looking to expand into new categories within quick commerce and plans to expand product offerings. 

Food Delivery

In contrast to quick commerce, the food delivery business’ profit zoomed 6X to INR 192.72 Cr from INR 25.66 Cr in the same quarter previous year. Adjusted EBITDA margin also jumped 2.5% in the quarter under review from 0.3% in the same quarter previous year.

While its revenue increased 23% YoY to INR 1,636.88 Cr in the quarter, the company reported a GOV growth of 19.2% YoY to INR 7,436 Cr. Average MTU for this vertical zoomed 19% YoY to 14.9 Mn, and average monthly transacting restaurant partners surged to 2.43 Lakh from 1.97 Lakh in Q3 FY24. 

Majety said that the company’s operating margins.continue to rise in tandem with contribution margins, which have now gone up to 7.4%. He said that this has led to an increase in advertising revenues, and efficiencies in our delivery network which have served to amplify operating leverage.

“We continue to drive this growth through new offerings which aim to target a specific need for consumers like Bolt and Snacc (faster food delivery), and Pocket Hero and Eco Saver (affordability initiatives). We strongly believe that these will open up new TAM, and grow the engagement of consumers with our platform,” Majety added. 

It is pertinent to mention that the company launched Bolt in October 2024 to give consumers access to 10-15 minute deliveries from select restaurants. Since its launch, Swiggy has expanded this offering to 425 cities for about 15 Mn users. This offering contributed about 9% of Swiggy’s food delivery revenue in the quarter, up from 5% in November 2024. 

Moving forward, Swiggy maintained its guidance of 18-22% annual growth rate for the food delivery category in the medium-term, along with a near 5% EBITDA margin in the near future. 

Out-Of-Home Consumption

This vertical, which comprises exclusive events and experiences business Swiggy SteppinOut and restaurant reservations and booking platform Dineout, saw a sharp YoY decline in its net loss reported in the quarter. Swiggy reported a net loss of INR 8.18 Cr for its out of home consumption vertical, down 82% YoY from INR 46.44 Cr. 

While its revenue from this vertical surged 84% YoY to INR 66.45 Cr, its GOV zoomed 68% YoY to INR 821 Cr. 

Just like last quarter, Majety claimed that the vertical is at the “cusp” of breaking even as its adjusted EBITDA margin loss improved to 1%.

He further claimed that Dineout turned profitable this quarter. However, in the statement, the company said that Dineout reached breakeven in December 2024.

In the December quarter, Swiggy also launched a new offering on its app, Swiggy Scenes, under its DineOut vertical. The new feature allows users to book parties, events, and live music at Swiggy’s partner restaurants.

Majety said that the “events reservation business” is set to expand with the Swiggy Scenes on the company’s unified app creating a “one-stop-shop focused primarily on bookings of in-restaurant events”.

Other Verticals

Outshining revenue generated from its food delivery vertical, Swiggy’s supply chain and distribution vertical contributed the most to its top line. The company’s revenue from its supply chain and distribution vertical stood at INR 1,693 Cr during the quarter under review, up 22.9% from INR 1,377 Cr in Q3 FY24. Its adjusted EBITDA loss from the vertical also improved 18% YoY to INR 78 Cr.  

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

Meanwhile, its platform innovations vertical, which includes private brands, Swiggy – Genie, Swiggy-Minis, Insanely Good, among others, saw its revenue fell 53% to INR 22.86 Cr in Q3 FY25 from INR 48.22 Cr in the previous year’s quarter. Its loss in this vertical also declined 64% to INR 10.52 Cr from INR 29.57 Cr in the previous year quarter. 

Where Did Swiggy Spend?

Swiggy’s bottom line took a hit as expenses surged. Total expenses stood at INR 4,898.3 Cr in Q3 FY25, up 32% YoY and 14% QoQ. The biggest reason for this increase was the rising spending on the quick commerce segment. 

On the quick commerce expense, Majety said that while Swiggy’s competitors (“incumbents”) are making investments to find favour to an “ever-broadening base of consumers”, Swiggy is “responsive and balanced in our strategy, and continue modulating our investments for sustainable GOV growth”.

“Our investments are focused on geographical expansion, customer acquisition/retention, and competitive dynamics, in that pecking order. This thrust implies that we have added 86 stores in just the month of January, and have grown MTUs to 9 Mn (+2Mn vs Q3) already. We believe that competitive intensity as well as dark store rollouts in the sector will remain elevated in the near term, impacting margins temporarily before they head back up,” he added.  

Purchase Of Stock In Trade: This was the biggest expense for Swiggy in the quarter. The company spent INR 1,557.38 Cr under the head, up 18% from INR 1,324.40 Cr in the year-ago quarter. 

Delivery & Related Charges: The company spent INR 1,126.94 Cr on deliveries in the quarter, up 30% YoY.

Employee Benefits: Swiggy spent INR 656.77 Cr on its employees in the quarter, up 50% YoY. 

Ad Expenses: Swiggy spent INR 751.49 Cr on ads and sales promotion in the quarter, up 65% YoY.

Shares of Swiggy ended today’s trading session 3.59% lower at INR 418.10 on the BSE.

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