Swiggy Reports Wider-Than-Expected Second-Quarter Loss Despite Revenue Growth

Food delivery and quick-commerce firm Swiggy has reported a consolidated net loss of ₹922 crore ($97.24 million) for the quarter ended September 30. While the figure marks an improvement from the net loss of ₹1,092 crore recorded during the same period a year earlier, it missed analyst expectations of a ₹792 crore loss, according to data compiled by LSEG.

Despite the bottom-line miss, the company's revenue from operations rose 36.1% year-on-year to ₹7,571 crore, surpassing analysts' estimates of ₹7,281 crore.

The financial results highlighted a stark contrast between Swiggy's core food delivery operations and its quick-commerce arm, Instamart. The food delivery business reported an adjusted core profit of ₹341 crore, up from ₹240 crore a year earlier. This growth was supported by higher advertising revenue and improved delivery efficiencies.

Conversely, losses at Instamart widened as the company scaled up spending on pricing, customer acquisition, and warehouse expansion. Instamart's adjusted core loss increased to ₹895 crore from ₹849 crore in the corresponding quarter last year, even as its net order value rose 34.8% to ₹6,594 crore.

India's quick-commerce sector has seen heavy investments in networks of small warehouses, known as dark stores, to meet growing consumer demand for rapid deliveries of groceries and daily essentials. During the quarter, Swiggy added 69 net dark stores, bringing Instamart's total network to 1,240 stores across 133 cities.

However, this rapid expansion and competitive pricing pressure impacted margins. Instamart's contribution margin deteriorated to negative 1% of gross order value, down from negative 0.2% in the preceding quarter, reflecting continued investments in customer retention and market share.

Competition in the segment remains intense. Rival Eternal’s Blinkit added 308 net stores during the September quarter and stated plans to accelerate its expansion without a near-term reduction in margins.

"Swiggy's latest financial results highlight the classic trade-off between growth and profitability in the competitive Indian quick-commerce market. While top-line revenue growth and the profitability in food delivery remain encouraging, heavy capital expenditure on dark store expansion and customer acquisition continues to pressure margins. Balancing network scale with unit economics will be critical for long-term sustainability in this segment." — Dr. Shishir Gupta, Founder & CEO, StartupLanes