Swiggy's Q3 loss widens by 39% as quick commerce expenses pile up
In the October-December quarter, Swiggy witnessed a stable increase in topline as well as an increase in expenses, dragging its P&L further in the red.
Quick commerce and food delivery player Swiggy saw its losses surge by 39% year-on-year (YoY) in Q3 FY25, bogged down by rapid expansion in the hotly contested quick commerce segment, along with a 30% growth in operating revenue.
The foodtech company's losses widened to Rs 799 crore from Rs 574 crore in the previous year.
The Sriharsha Majety-led company clocked a 30% YoY growth in operating revenue to Rs 3,993 crore in the quarter ended December 2024, up from Rs 3,048 crore earned in the corresponding quarter last year, according to an exchange filing.
Its total expenses also increased by 32% YoY, mainly driven by a rise in employee benefit expenses, delivery-related charges, and advertising and sales promotion.
The company's quick commerce segment, which lags behind its listed peer Zomato's Blinkit, more than doubled its operating revenue for the second consecutive quarter to Rs 576 crore.
While Swiggy managed to nearly double its dark store count since Q2, its rapid expansion has taken a hit on the segment's profitability.
"Growth investments in quick commerce led to a reduction in contribution margin from -1.9% in Q2 FY25 to -4.6% in Q3 FY25, as the company ramped up user activation and dark store expansion across geographies," Swiggy stated in a press note.
Swiggy's core food delivery business, registering a topline of Rs 1,636 crore, saw a marginal growth of 3.7% from the previous quarter, hurt by a broad-based demand slowdown. On a year-on-year basis, this growth was more than 23%.
Its hero offering in the quick food delivery space, Swiggy Bolt, already accounts for 9% of its overall food deliveries.
"The secular expansion in food delivery margins and cashflow 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," said Sriharsha Majety, MD and Group CEO, Swiggy in a press note.
The Bengaluru-based firm also saw its Dineout business reach breakeven for the month of December 2024. Since then, it has ramped up its going-out segment offerings with Swiggy Scenes.
Shares of the company closed 3.69% lower at Rs 418.05 on the NSE today.
Swiggy's closest peer in both food delivery and quick commerce, Zomato, saw its profits decline by 57.24% YoY to Rs 59 crore in Q3 as Blinkit's rapid expansion and a slowdown in food delivery hurt its bottomline.
Just a month ago, Swiggy doubled down on diversifying its offerings by adding a professional services marketplace, which would enable consumers to book lessons, consultations and classes for a host of services including fitness coaches, yoga instructors, dance instructors, language learning, and education coaches.
Before that, it launched Snacc as a standalone app for 10-minute food delivery service. This is the company's second quick food delivery foray after the robust success of Swiggy Bolt. However, the foray into private labels by food delivery platforms has turned into a point of contention between operators and restaurant associations.
(The copy was updated with additional information.)
Edited by Kanishk Singh