Swiggy posts widened loss of Rs 1,065 Cr in December quarter as Instamart expenses mount
Despite a 53% revenue jump, Swiggy's Q3 loss widened to Rs 1,065 crore, up from Rs 799 crore a year ago. Heavy spending on Instamart in customer acquisitioon and store infrastructure deepened the red ink, overshadowing profits in the food delivery arm.
Sriharsha Majety-led Swiggy posted a widened loss of Rs 1,065 crore in the December quarter, even as its topline grew by 53% to touch Rs 6,148 crore helped by contribution from Instamart and its food delivery arm during the festive quarter.
The company had posted a loss of Rs 799 crore in the same period last fiscal year.
Sequentially, its bottom line marginally improved from Rs 1,092 crore. The company's consumer business, inclusive of food delivery, quick commerce and dine-out, together clocked Rs 18,122 crore of Gross Order Value, an improvement of 50% from last year.
Instamart, the company's quick commerce arm, grew its topline by 75% to Rs 1,052 crore, however, sequentially its growth was marginal. The growth came on the back of heavy expenditure pushing its bottom line further in red, with losses in the business widening to Rs 908 crore. The quarter also witnessed higher discounting for consumers and larger payout to gig-workers on account of strikes orchestrated by gig workers union.
"However, amidst irrational competition, our recent investments into lower consumer-side monetization have not yielded the desired incremental order-growth, especially at the bottom of the AOV-pyramid; and are being reviewed," shared Sriharsha Majety, Co-founder, MD & Group CEO, Swiggy in a letter to shareholders.
The more mature and cash generating food delivery business grew by 22% to Rs 2,277 crore, bringing a profit of Rs 272 crore.
The company's newer out-of-home consumption business has been picking up pace, with 63% growth in its topline to Rs 111 crore and growing earnings of Rs 8 crore.
It primarily consists of Dineeout and Scenes. "Our Out of Home Consumption business has been a success story of coming from behind through a frugal acquisition, and letting innovation and integration drive profitability. Over 48k restaurants are now utilizing the service as a strategic growth lever, and the QoQ growth in restaurant partners has been at a 6-quarter high," added Majety.
The company's performance in the quarter comes after it raised Rs 10,000-crore qualified institutional placement (QIP) in December. Beyond the institutional fundraise, Swiggy ended the September quarter with Rs 4,605 crore in cash. It also clocked in about Rs 2,400 crore from selling a 12% stake in Rapido, taking its war-chest to just over Rs 7,000 crore before the fundraise.