Swiggy: Swiggy operating revenue up 36% in FY24, losses down 44%

Food and grocery delivery company to public markets Beater has reported a 36% year-on-year increase in its operations revenue for Fiscal year 24 to Rs 11,247 crore, driven by strong growth in its fast trade vertical Instant Store and the out-of-home consumption business.

The Bengaluru-based company significantly narrowed its net loss for the year to Rs 2,350 crore, down 44% from a year ago, according to its annual report.

In comparison, its main rival Zomato reported a net profit of Rs 351 crore in FY24.

Swiggy’s loss-making decline was mainly due to a controlled 8% increase in its total expenses from a year earlier, after cutting staff costs and advertising and sales promotion expenses.

In January of this year, Swiggy cuts workforce by 6%affecting at least 350 to 400 roles across teams such as technology, call centers and corporate roles, ET reported.

“The continued scale increase over the past few years is driven by upward momentum seen across both demand and supply side factors with ~14 million users transacting on our platform at a high frequency of ~4.5x, supported by our extensive delivery network of over 390,000 delivery partners,” the company said in its annual report.

“Profitability has improved dramatically year-on-year as the peak of investments in Instamart is behind us and the business continues to grow rapidly; while the relatively more mature food delivery business is growing profitably,” it said. Swiggy’s operating income of Rs 11,247 crore for the year ended March 31, compared with Zomato‘s Rs 12,114 crore in the same period.

Swiggy’s core food delivery business reported a gross order value (GOV) of Rs 24,700 crore, up 15% from FY23. This is against Zomato‘s Rs 32,224 crore, which translates to a 56% stake in food delivery for the Gurgaon-based company.

Meanwhile, fast-commerce vertical Instamart reported a 58% rise in GOV to Rs 8,100 crore, or nearly $1 billion, in FY24.

“We grew our fast-trade business to almost a third of the food delivery business in just three years. This rapid expansion came about thanks to increased food density. dark stores in existing cities and expansion into new cities,” Swiggy said, adding that Instamart currently operates in 27 cities with 523 active dark stores or micro warehouses.

Blinkit, a fast commerce platform owned by Zomato, which had 526 dark stores as of March 31posted a GOV of Rs 12,469 crore for FY24.

In the fast-commerce space, Swiggy Instamart competes with Nexus Venture Partners-backed startup Zepto, Tata Digital’s Bigbasket and now Walmart-owned Flipkart’s recently launched Minutes service, besides Blinkit.

As of July, brokerage firm UBS estimated the market Blinkit share at 40-45%, with Swiggy Instamart at 20-25%followed by Zepto with 15-20% and BB Now with 10-15%.

Swiggy’s out-of-home business, which includes Dineout, reported a GOV of Rs 2,200 crore in FY24, double from Rs 1,100 crore in FY23. “We acquired Dineout in 2022 and integrated it within the Swiggy app to benefit from the unified app. The increase in revenue is due to higher advertising commissions and fees, user fees, and incremental revenue from ticket sales for various events on our platform. Our margins continue to improve rapidly and the business is approaching breakeven,” it said.

The company said it has created a structured framework for new offerings where it evaluates the product and its commercial market fit over a finite period of time, and then scales, pivots or closes the product, based on its progression.

“We have launched a number of new services, which have now been integrated into our larger businesses after a successful testing phase of their product-market fit,” he said. “For example, we piloted Swiggy Mall in 2023, offering an expanded SKU (stock keeping unit) base delivered through dark megastores. This helped us bridge the gap between traditional e-commerce and express commerce. With exponential improvements in express commerce logistics, we have integrated Swiggy Mall into Instamart.”

Swiggy has filed a confidential filing with capital markets regulator Securities and Exchange Board of India (Sebi) for a Initial public offering (IPO) of Rs 10,414 crorewhich includes a proposed fresh capital increase of Rs 3,750 crore.