Indian food delivery giant Swiggy posted a narrower loss in the September quarter—its first earnings since going public last month—buoyed by growing demand across its food delivery and quick commerce segments.
However, the numbers also underline Swiggy’s uphill battle to catch up with rival Zomato, which has already achieved profitability.
For the quarter ended September 30, 2024, Swiggy reported a loss of Rs 626 crore ($74 million), improving from Rs 657 crore a year ago. Still, losses edged up sequentially from Rs 611 crore in the previous quarter.
Revenue from operations climbed to Rs 3,601 crore—a 30% increase year-on-year.
In comparison, rival Zomato posted a net profit of Rs 176 crore ($21 million) for the September quarter. Swiggy, by contrast, is targeting adjusted EBITDA profitability at the company level by the December quarter of 2025, reflecting the challenges it faces in closing the profitability gap.
The food delivery business showed sequential growth for the second quarter in a row, following a period of stagnation. Adjusted revenue rose 18% year-on-year to Rs 1,808 crore, while Gross Order Value (GOV) reached Rs 7,191 crore, up from Rs 6,275 crore in the same quarter last year. Swiggy attributed the improvements to higher monetization in advertising, reduced delivery costs, and tech-driven efficiencies.
The company projects GOV growth in the “high teens” for the year, with expectations of an 18-22% compound annual growth rate (CAGR) over the medium term.
Swiggy’s quick commerce arm, Instamart, also delivered robust growth.
Adjusted revenue for Instamart more than doubled year-on-year to Rs 513 crore, while GOV surged to Rs 3,382 crore from Rs 1,927 crore a year ago. The company plans to expand its footprint by doubling its dark store count and rolling out large-format “megapods” in top cities by March 2025.
Swiggy Instamart is doubling down on expanding its store network and boosting advertising revenue to improve take rates. The company reported a 7.3% increase in Average Order Value (AOV) for the first half of FY25 and expects double-digit AOV growth annually moving forward.
“Growth in advertising has been a key driver for take-rate expansion,” Swiggy stated. “As our platform’s share of user spends improves and we offer more business enablement services to our merchant partners, we expect steady-state take-rates and contribution margins to expand.”
India’s food delivery market remains fiercely competitive, with Zomato commanding 58% of the market share compared to Swiggy’s 34%, according to industry estimates. Zomato’s food delivery GOV for the September quarter grew to Rs 8,358 crore, maintaining its lead over Swiggy. Meanwhile, Zomato’s quick commerce business, Blinkit, reported a 129% year-on-year growth in adjusted revenue, hitting Rs 1,156 crore.
Zomato’s shares have also outperformed Swiggy’s on the public markets.
After debuting at Rs 76 per share in 2021, Zomato’s stock has more than doubled, closing at Rs 280 on Tuesday. Swiggy, which was listed last month, has risen over 7% so far since then.
