Swiggy aims to turn operationally profitable by December 2025

Swiggy aims to turn operationally profitable by December 2025

Swiggy, which saw a healthy 30 percent growth in operating revenue and also narrowed its losses in September quarter, is aiming to turn operationally profitable (positive earnings before interest, taxes, depreciation and amortisation, or EBITDA) by the end of next calendar year, the company’s management said in a letter to shareholders.

“At the consolidated group level, we expect to achieve positive Adjusted EBITDA by Q3FY26 (Oct-Dec 2025),” the letter stated. If Swiggy, which listed on the stock exchanges in November, meets its goal of turning profitable in about five quarters, it will sooner than what rival Zomato took. Gurugram-based Zomato, which listed on the stock exchanges in 2021, took around two years to achieve the same milestone.

Swiggy added that the company’s core business, food delivery, is already profitable on an Adjusted EBITDA basis and that it is now ramping up margins every quarter. That includes betting on new projects like Bolt, the company’s 10-minute food delivery service.

In under two months, Bolt already accounts for 5 percent of the company’s total food orders. The company’s adjusted revenue from food delivery stood at Rs 1,808 crore in Q2FY25, up 18 percent from Rs 1,535 crore. The company’s adjusted EBITDA margin stood at 1.6 percent, an improvement from -0.8 percent during the same time last year.

“This has been the outcome of concerted efforts to simplify our tech-stack, cost-efficiencies in manpower and unlocking efficiencies in marketing spends by mining the benefits of our unified app,” the company said in its letter to shareholders.

Zomato, on the other hand had an adjusted revenue of Rs 2,340 crore from its food delivery business during the same period and was profitable on a post tax basis.

Swiggy's food delivery business also saw an increase in the number of monthly transacting users (MTUs) from 12.9 million in Q2FY24 to 14.7 million in Q2FY25. Zomato was ahead at 20.7 million MTUs.

Quick commerce

Food delivery is a more mature business for Swiggy, so the company is currently focusing on growing its quick commerce arm, Swiggy Instamart. Swiggy Instamart, which competes closely with Zomato's Blinkit and Zepto, has a gross order value (GOV) run rate of $1.6 billion.

Blinkit, the market leader, has a GOV run rate of around $3 billion and Zepto has a GOV of $2 billion, c0-founder Aadit Palicha had told Moneycontrol earlier.  Zepto, the rapid delivery player that has been on a fundraising spree, is now the second biggest quick commerce player, beating Swiggy Instamart but trailing market leader Zomato-owned Blinkit, in the highly competitive industry, according to Motilal Oswal’s latest report. 

Asked on market share, Swiggy chief Sirharsha Majety told Moneycontrol that it would be "very hard to have a conversation based on unaudited financials."

Zepto is the only privately funded company in the space.

On the revenue front, Swiggy Instamart had an adjusted revenue of Rs 513 crore in Q2FY25, up from Rs 240 crore during the same period last year. That compares with Blinkit's revenue of Rs 1,156 crore, indicating that Swiggy has to make up ground.

"Wile we have a playbook for overall contribution profitability, we are going to earmark specific investments which we believe are optimal to acquire and ring fence users to our platform to sustain long term profitable growth," Swiggy said in its letter to shareholders.

Swiggy had a cash chest of Rs 4,531 crore as of September and raised Rs 4,539 crore, net of expenses, during its massive IPO. In all, Swiggy has a cash balance of Rs 9,070 crore which gives it enough ammunition to compete with Zomato (and Blinkit), which has a total cash balance of Rs  19,300 crore, after the Rs 8,500 crore QIP, and Zepto which has raised Rs 11,400 crore in the past five months alone.

Swiggy's share prices closed at Rs 501.30 apiece on the BSE on December 3.