Results India

Swiggy Ltd narrowed its quarterly loss to Rs 922 crore in Q2 FY27, a 15.6% improvement from Rs 1,092 crore a year earlier, as revenue jumped 36% to Rs 7,571 crore, according to ET Markets.

Swiggy Q2 Profit Narrows to Rs 922 Crore Amid 36% Revenue Surge

Swiggy's Q2 results show progress in revenue growth and margin improvement, but sequential losses and widening EBITDA losses highlight ongoing operational challenges. The company's consolidated profit after tax fell to Rs 922 crore from Rs 1,092 crore, while revenue from operations surged 36% year-on-year. Instamart's gross order value (GOV) grew 31% to Rs 9,230 crore, driven by store expansion and pricing initiatives. Swiggy also sold its Lynks Logistics business to Udaan's parent company for Rs 500 crore, securing a 3.2% stake in Udaan. The sale reduces financial burden but may dilute Swiggy's logistics capabilities. Consolidated cash reserves stood at Rs 13,662 crore as of September, providing short-term flexibility.

The revenue growth and margin improvements in food delivery suggest strengthening core operations, while Instamart's expansion indicates a strategic push into quick commerce. However, sequential losses increased to Rs 792 crore from Rs 792 crore in the prior quarter, and adjusted EBITDA loss widened to Rs 760 crore from Rs 695 crore. Investors face mixed signals as the company balances growth with profitability. Competitors like Udaan may benefit from the Lynks acquisition, while customers could see changes in service offerings due to store expansion. Employees may face adjustments as Swiggy adds 69 net dark stores, raising its network to 1,240 across 133 cities.

Swiggy's financial health remains a key focus, with Instamart's improved EBITDA margin (-9.7% vs -12.1% YoY) and 34.8% YoY growth in net order value to Rs 6,594 crore offering opportunities for margin optimization. Expansion of Toing into 50+ cities could capture new customer segments. However, high capital expenditures for store growth may strain cash flow, and the company's ability to sustain growth in Instamart and food delivery remains critical.

Swiggy expects double-digit sequential growth in Instamart's net order value for the December quarter. The Lynks Logistics transaction is finalized, and the company will report full-year guidance for its core businesses.

Swiggy's Q2 results show progress in revenue growth and margin improvement, but sequential losses and EBITDA widening raise questions about short-term profitability. Sustaining growth in Instamart and food delivery remains critical for long-term success.

Topics: Swiggy, Food Delivery, Quick Commerce, EBITDA, Revenue Growth, Instamart, Lynks Sale, Cash Reserves, Net Order Value, Store Expansion

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Source: ET Markets