Swiggy Q2 Results: A Mixed Bag of Growth and Losses

Swiggy Ltd. has posted a 54.4% year-on-year rise in its consolidated revenue during the quarter ended September, with the food delivery major logging a revenue of Rs 5,561 crore.

Revenue Growth: A Positive Trajectory

The company’s revenue has exceeded the estimate of Rs 5,284.63 crore of the analysts tracked by Bloomberg, indicating a strong performance in the food delivery space. The food delivery business maintained its positive trajectory, posting a 22% year-on-year growth and 6.8% quarter-on-quarter rise in revenue.

The gross order value of the food delivery business grew in line with the guidance at 18.8% year-on-year to Rs 8,542 crore. This growth can be attributed to the increasing demand for online food delivery services, especially among the younger population in India. To learn more about the food delivery industry in India, click here.

Quick Commerce: The Standout Performer

However, the standout performer remains its quick commerce arm, which registered a staggering 100% year-on-year growth and 21.6% quarter-on-quarter increase in revenue. This indicates strong traction in its express grocery and essentials delivery model. The Instamart segment’s gross order value rose 108% year-on-year, with the company adding 40 dark stores.

The average order value rose 39.7% year-on-year led by traction in Maxxsaver. This growth in the quick commerce segment can be attributed to the increasing demand for fast and convenient delivery of groceries and essentials. For more information on quick commerce in India, visit our website.

Supply Chain and Distribution Operations: A Bright Spot

Another bright spot for Swiggy was its supply chain and distribution operations, which soared 76% year-on-year. This reflects the company’s continued efforts to expand its backend infrastructure and delivery capabilities.

The Out of Home Consumption segment continued its profitable trajectory with 52% year-on-year gross order value growth, the company said in an exchange filing. This growth can be attributed to the increasing demand for food delivery services in the out-of-home consumption segment. To learn more about out-of-home consumption, click here.

Net Loss Widens: A Cause for Concern?

Despite the strong revenue growth, Swiggy’s net loss widened to Rs 1,092 crore in the second quarter, compared to a loss of Rs 554 crore in the same quarter last year. The operating loss or earnings before interest, taxes, depreciation, and amortisation also widened to Rs 798 crore.

The company’s loss can be attributed to the increasing costs of expansion, marketing, and employee benefits. However, the company’s focus on expanding its quick commerce arm and supply chain and distribution operations is expected to drive growth in the long term. For more information on Swiggy’s financials, visit our website.

Fund Raising Plans: A Positive Move

Swiggy has announced that it is mulling to raise Rs 10,000 crore via Qualified Institutional Placement or any other permitted modes under applicable laws. This move is expected to provide the company with the necessary funds to drive growth and expansion plans.

The company’s plans to raise funds can be seen as a positive move, as it will provide the company with the necessary resources to drive growth and expansion. For more information on fund raising in India, click here.

Stock Performance: A Mixed Bag

The quarterly earnings were shared after market hours, with the stock settling 0.24% lower at Rs 417.95 apiece on the NSE, compared to a 0.68% decline in the benchmark Nifty 50.

Swiggy shares have fallen 8.34% in the last 12 months and 22.73% year-to-date. However, out of 26 analysts tracking the company, 20 maintain a ‘buy’ rating, two recommend a ‘hold’ and four suggest ‘sell’, according to Bloomberg data.

The average 12-month consensus price target of Rs 482.57 implies an upside of 15.5%. This indicates that the analysts are bullish on the company’s growth prospects, despite the current losses. For more information on Swiggy’s share price, visit our website.

Conclusion

In conclusion, Swiggy’s Q2 results show a mixed bag of growth and losses. While the company’s revenue has grown strongly, the net loss has widened. However, the company’s focus on expanding its quick commerce arm and supply chain and distribution operations is expected to drive growth in the long term.

Investors should keep a close eye on the company’s progress and watch for any updates on the fund raising plans. With the average 12-month consensus price target implying an upside of 15.5%, the company’s shares may be a good bet for long-term investors. For more information on Indian stock market news, click here.