Swiggy's Q2 loss narrows on food delivery gains, misses estimates

India's Swiggy reported a narrower second-quarter loss on Thursday, helped by improving profitability in its food delivery business, although the result fell short of analyst expectations.

The quick-commerce and food delivery firm posted a consolidated net loss of 9.22 billion rupees ($97.24 million) for the quarter ended September 30, compared with a loss of 10.92 billion rupees a year earlier. Analysts had expected a loss of 7.92 billion rupees, according to data compiled by LSEG.

While the company's food delivery business reported a record adjusted core profit, losses at quick-commerce Instamart, which delivers everything from phones to groceries, widened as the company stepped up spending on pricing, customer acquisition and warehouse expansion.

Quick answers to key questions

•5 QUESTIONS

1

How much did Swiggy lose in the second quarter?⌵

Swiggy reported a consolidated net loss of ₹9.22 billion for the quarter ended September 30, down from ₹10.92 billion a year earlier. The loss was higher than analysts’ estimate of ₹7.92 billion.

2

Why did Swiggy's Q2 loss narrow?⌵

Improving profitability in food delivery helped reduce Swiggy’s overall loss. The food delivery business reported a record adjusted core profit, supported by higher advertising revenue and delivery efficiencies.

3

Why did Swiggy's Instamart losses widen in Q2?⌵

Instamart’s adjusted core loss widened to ₹8.95 billion as Swiggy increased spending on pricing, customer acquisition and warehouse expansion. Its contribution margin also deteriorated to negative 1% of gross order value.

4

How profitable was Swiggy's food delivery business in Q2?⌵

Food delivery reported adjusted core profit of ₹3.41 billion, up from ₹2.40 billion a year earlier. Higher advertising revenue and delivery efficiencies helped improve profitability.

5

How many dark stores did Swiggy add for Instamart in Q2?⌵

Swiggy added 69 net dark stores during the quarter, bringing Instamart’s network to 1,240 stores across 133 cities.

Swiggy's revenue from operations rose 36.1% year-on-year to 75.71 billion rupees, beating analysts' estimate of 72.81 billion rupees, per LSEG data.

Its food delivery business reported adjusted core profit of 3.41 billion rupees, up from 2.40 billion rupees a year earlier, helped by higher advertising revenue and delivery efficiencies.

Instamart's adjusted core loss widened to 8.95 billion rupees from 8.49 billion rupees a year earlier, even as its net order value rose 34.8% to 65.94 billion rupees.

India's quick-commerce companies have been investing heavily in networks of small warehouses, known as dark stores, to meet rising demand for rapid deliveries of groceries and other products.

Swiggy added 69 net dark stores during the quarter, taking Instamart's network to 1,240 across 133 cities.

Its contribution margin in quick commerce deteriorated to negative 1% of gross order value from negative 0.2% in the preceding quarter, reflecting spending on pricing and customer retention.

Rival Eternal's Blinkit, meanwhile, added 308 net stores during the September quarter and said it planned to accelerate expansion without a near-term reduction in margins.

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