Swiggy share price jumped 10% to end at ₹541.95, a 52-week high on December 3rd 2024. This is in line with the company declaring its Q2FY25 results today as well.
Since its initial public offering (IPO) in November, Swiggy stock has seen a 39% rise from its issue price of ₹390. This has shown that investors are confident in the company’s growth potential.
This is the first quarterly earnings report for Swiggy since its IPO and it has provided great insights into its financial health and growth trend.
For the quarter ending September 30th 2024, Swiggy reported;
Net Loss: ₹625.5 crore against ₹657 crore for Q2FY24 and ₹611 crore for Q1FY25.
Revenue: ₹3,601 crore, which is 30% higher than ₹2,763 crore in the year ago period and 12% more than ₹3,222 crore in the quarter earlier this year.
EBITDA Loss: ₹555 crore from ₹544 crore in Q1FY25 and decline from ₹624 crore in Q2FY24.
Although there are some issues rectifying Swiggy’s financial statements, constant troubles especially in the segment of quick commerce, it demonstrates increased revenues and narrowing losses across its segments.
Swiggy’s core food delivery segment contributed ₹1,577 crore to its revenue, reflecting:
22% YoY growth
4% QoQ growth
Positive EBIT of ₹122 crore, compared to a loss of ₹44 crore in Q2FY24 and a profit of ₹67 crore in Q1FY25.
The operating profit of this segment speaks about the operational effectiveness and dominance of Swiggy in the consolidating food delivery market of India.
Swiggy’s Instamart, its quick-commerce business, achieved:
Revenue Growth: 136% YoY to ₹490 crore.
Loss Reduction: EBIT loss of ₹317 crore, down from ₹320 crore in Q2FY24.
Even as the firm recorded some losses instamart remains fixated on its expansion strategy with 52 new stores in 12 cities and with the ambition of delivering a new active dark store area of 4 million sq ft by march 2025.
With 32,000 unique items and an average delivery time of 13 minutes, Instamart is tightening its grip on the quickly emerging segment of quick commerce.
Swiggy’s Gross Order Value (GOV) rose:
30% YoY to ₹11,306 crore.
For the current year, the expected growth is 24% in sequence for Instamart, and the contribution margins have been growing by 124 basis points for the current quarter.
These figures show the capacity of Swiggy to unlock growth from the rising demand at the same time as managing the supply.
Swiggy made a strong debut on the stock market on November 13th 2024. It listed at a 7.7% premium at ₹420 against its issue price of ₹390. The IPO which raised ₹11,327 crore, saw strong subscription at 3.59 times.
Since listing, Swiggy’s shares have shown consistent growth, with prominent brokerages like UBS and Motilal Oswal endorsing its potential:
UBS Rating: ‘Buy’ with a target price of ₹515, citing stabilizing market share and quick-commerce growth.
Motilal Oswal Rating: ‘Neutral’ with a target of ₹475, emphasizing Swiggy’s all-in-one app strategy as a differentiator.
Quick commerce, referred to by Motilal Oswal as a “once-in-a-lifetime opportunity,” represents a significant growth area for Swiggy. Competing with players like Zomato’s Blinkit and Dunzo, Swiggy is positioning itself as a leader in this sector through:
Expanding dark stores and logistics infrastructure.
Offering a seamless, integrated experience via its all-in-one app.
Responding swiftly to consumer behavior for ultra-fast delivery.
These strategic initiatives are expected to drive revenue growth and improve margins in the long term.
The outlets of Swiggy’s food delivery segment are still profitable, but the Q-commerce segment in which this company operates encountered losses as too many businesses have issues with scaling up in the expensive segment. Also, competition from Zomato and increased operating cost are the challenges that will still be present on the way.
Nonetheless, from a purely business perspective, Swiggy has rightly focused on innovation and Operational efficiencies which will help it sustain the growth. The same can be attributed to the company’s strategic shift towards customer convenience, as well as flexibility in responding to changes on the market, which will make it possible to speak about a monopolistic position in the further development of the digital economy in India.
The company’s stock response and financial results indicate a company in the process of transition, and that is Swiggy. Building on the sustainable top and bottom-line revenue growth, impressive IPO show, and operational focus on fast-growing segments such as quick commerce and food delivery, Swiggy is set to create sustainable value in the future.
Closely monitor its ability to reduce losses and maintain momentum in the competitive Indian market. Currently, the swiggy’s peak at the 52 week high ₹541.95 is a positive indication and an indication of improving confidence in the business.