Swiggy’s revenue from operations grew significantly in Q3 FY25, recording a 31% year-over-year increase
Swiggy, one of India’s leading food delivery and quick commerce platforms, has released its financial results for the third quarter of the fiscal year 2024-25 (Q3 FY25). While the company has demonstrated impressive revenue growth, its profitability remains a major concern as losses continue to widen. The company has been aggressively expanding its quick commerce segment, Instamart, while maintaining its leadership in food delivery. However, increased spending and competition have put pressure on its bottom line, raising questions about its path to profitability.
Financial Performance Overview
Swiggy’s revenue from operations grew significantly in Q3 FY25, recording a 31% year-over-year increase. The company’s total revenue for the quarter stood at ₹3,993 crore, up from ₹3,049 crore in the same period last year. This growth was driven by an increase in food delivery orders, higher spending per customer, and a remarkable surge in its quick commerce business.
Despite the strong revenue growth, Swiggy’s losses widened considerably. The company reported a net loss of ₹799 crore in Q3 FY25, a significant increase from the ₹574 crore loss in Q3 FY24. The rising losses have been attributed to increasing operational costs, higher discounts, and investments in expanding its quick commerce network.
Total expenses also saw a sharp increase of approximately 32%, reaching ₹4,898 crore compared to ₹3,700 crore in the previous year. This indicates that Swiggy is prioritizing growth over profitability, a strategy that has led to concerns among investors and market analysts.
Segment-Wise Performance
Food Delivery
Swiggy’s food delivery business remains a core part of its operations and continues to show stable growth. The company reported a Gross Order Value (GOV) of ₹7,436 crore for this segment, marking a 19.2% increase from the same quarter last year.
The increase in food delivery orders was primarily driven by strong consumer demand, an expanding restaurant network, and strategic marketing initiatives. Swiggy has also focused on improving customer experience through faster deliveries, enhanced user engagement, and attractive loyalty programs such as Swiggy One.
Quick Commerce (Instamart)
One of the biggest highlights of Swiggy Q3 results was the outstanding performance of Instamart, its quick commerce arm. The segment recorded a staggering 114% increase in revenue, making it the fastest-growing division of the company.
Gross Order Value for Instamart surged by 88% year-over-year, driven by increased demand for rapid grocery deliveries, expansion into new cities, and a growing preference for convenience shopping. Swiggy’s aggressive investment in expanding Instamart has resulted in higher consumer adoption, with a significant increase in repeat orders.
To support the rapid growth of Instamart, Swiggy added 96 new dark stores in Q3, bringing the total count to 705 by the end of the quarter. In January, the company added another 86 stores, reinforcing its commitment to dominating the quick commerce space. However, this expansion has also increased operating expenses, impacting the company’s profitability.
Challenges in Profitability
Swiggy’s profitability struggles are largely due to its aggressive investment in quick commerce. While Instamart is growing at an impressive rate, it remains a high-cost operation. The company’s quick commerce contribution margin declined by 270 basis points to 4.6%, reflecting the increased spending on infrastructure, logistics, and marketing.
The competitive landscape in the quick commerce industry is also intensifying, with players like Zomato’s Blinkit and Zepto rapidly expanding their operations. Swiggy is investing heavily in discounting and promotions to acquire and retain customers, which has further weighed down its financial performance.
Rising operational costs, including higher fuel prices, delivery partner incentives, and increased employee expenses, have also added to Swiggy’s financial burden. The company’s efforts to reduce delivery times and enhance customer satisfaction have resulted in higher expenditures on technology, supply chain management, and logistics.
Market Reaction and Investor Sentiment
Swiggy’s Q3 results have triggered mixed reactions from investors and market analysts. While the company’s revenue growth is impressive, its widening losses have raised concerns about its long-term profitability.
Following the announcement of the results, Swiggy’s stock price dropped by approximately 8%, hitting a record low. Investors remain cautious about the company’s high spending on quick commerce and its ability to achieve profitability in a competitive market.
Several leading brokerage firms have revised their outlook on Swiggy’s stock, with at least five firms lowering their price targets. Analysts have pointed out that while Swiggy’s expansion strategy is necessary for long-term growth, the company needs to find a balance between growth and profitability to regain investor confidence.
Future Outlook and Strategic Focus
Swiggy’s future growth will depend on how effectively it manages its operational costs while continuing to expand its market presence. The company has several strategic initiatives in place to improve its profitability, including:
- Optimizing Operational Efficiency: Swiggy is focusing on enhancing its logistics network, streamlining supply chains, and leveraging data analytics to improve delivery times and reduce costs.
- Scaling Quick Commerce Profitably: While Instamart is growing rapidly, Swiggy is working on improving its unit economics by optimizing inventory management, reducing wastage, and increasing order volumes per store.
- Enhancing Revenue Streams: The company is exploring additional revenue sources such as premium subscription services, advertising solutions for restaurants and brands, and expanding into adjacent categories like health and wellness.
- Strengthening Market Position: Swiggy continues to invest in brand-building initiatives, partnerships with restaurant chains, and innovative marketing strategies to strengthen its leadership in food delivery and quick commerce.
Swiggy’s Q3 FY25 results reflect a company in transition—one that is aggressively expanding while grappling with the challenges of profitability. The strong revenue growth, particularly in quick commerce, highlights Swiggy’s potential to dominate India’s growing demand for rapid food and grocery deliveries. However, the increasing losses underscore the need for a more sustainable business model.
The coming quarters will be crucial for Swiggy as it works to strike a balance between rapid expansion and financial stability. Investors and analysts will closely monitor how the company manages costs, improves margins, and moves toward profitability in the highly competitive food and quick commerce industry.
While Swiggy remains a formidable player in the Indian market, its ability to achieve profitability will determine its long-term success.
