Swiggy Q1 results in focus as rival Zomato pulls ahead in quick commerce

Mint

2 days ago

Bengaluru: Swiggy Ltd's June-quarter (Q1FY26) earnings, due on 31 July, will offer a critical test of whether India's second-largest food delivery platform can justify its valuation and win back investor confidence, particularly in quick commerce, where competition is intensifying and losses remain steep.
The Bengaluru-based company, co-founded by Sriharsha Majesty, Nandan Reddy, and Rahul Jaimini, reported revenue of ₹15,275 crore in FY25. Food delivery accounted for 59.6% of this, while Instamart, its grocery delivery vertical, contributed 29.8%. Smaller segments, including ads, dine-out, ticketing, its new fast-food service Snacc, and micro-delivery platform Pyng, brought in 5.3%. The remaining 4.2% came from other income sources.
The company posted a consolidated loss of ₹1,087 crore in the final quarter (January-March) of FY25, on revenue of ₹4,531 crore, according to its annual report.
By comparison, rival Eternal Ltd, formerly Zomato, reported a ₹175 crore profit for the same quarter. In the April–June period, Eternal's profit dropped to ₹25 crore due to higher investments in Blinkit and increased staff-related expenses, including stock options. In a significant shift, Blinkit's order value surpassed that of Eternal's core food delivery business in the quarter, becoming the firm's main growth driver.
Investors responded positively. Eternal's stock rose 20% in the week following its earnings announcement, pushing its market capitalization past ₹3 trillion and overtaking several Nifty 50 constituents, including Wipro, Tata Motors, JSW Steel, Nestlé India, and Asian Paints.
Swiggy's shares, meanwhile, have dropped over 41% since listing in November 2024, closing at ₹306 on 29 July.
Swiggy listed on the National Stock Exchange at ₹420 per share, a 7.7% premium to its issue price of ₹390. Its current market capitalization stands a shade above ₹1 trillion.
The spotlight now turns to Swiggy's founders—and whether they can earn the kind of investor confidence commanded by Eternal CEO Deepinder Goyal.
The spotlight now turns to its founders—and whether they can instill the kind of investor faith commanded by Eternal CEO Deepinder Goyal.
Mint breaks down four key themes to watch out for in Swiggy's Q1 results.
Food delivery margins improve, but trail Eternal
Swiggy's food delivery business reported gross order value (GOV) of ₹7,347 crore in Q4FY25, up 17.6% from a year earlier. For the first time, the business posted a modest operating profit, with margins of 2.9%.
According to an 11 July report by Elara Capital's Karan Taurani, the improvement was driven by cost cuts, higher average order values, and growth in Swiggy One, its paid membership programme, which now has over 5 million users.
Even so, Swiggy still lags behind Eternal, which posted a 5% margin in the same period. According to Elara, Eternal's users order more frequently and the company spends less on discounts. The brokerage expects Swiggy's margins to reach 4.8% by FY28. For that to happen, the company will need to grow repeat order volumes and improve delivery efficiency.
Instamart grows fast—but burns cash
Swiggy's grocery delivery arm, Instamart, more than doubled its GOV to ₹4,670 crore in the final quarter of FY25, making it the company's fastest-growing business. Yet the segment remains deeply loss-making, posting an operating loss of ₹732 crore in the same period.
Swiggy has pushed Instamart into smaller towns and broadened its product range to include beauty items, toys, and cleaning supplies. But in these markets, orders tend to be smaller and less frequent, making it harder to absorb fixed costs such as rent, staffing, and logistics. According to Elara Capital, while customer interest is growing, Instamart continues to burn cash and falls short of breakeven on a per-order basis.
Eternal's Blinkit, by contrast, is already delivering stronger results. In the April-June quarter, Eternal's revenue surged 71% year-on-year to ₹3,719 crore, driven largely by Blinkit, which outpaced even its food delivery segment.
Both firms are investing heavily in quick commerce. But while Eternal is beginning to see payoffs, Swiggy remains in an early, capital-intensive phase where losses are still widening.
Revenue growth strong, but market confidence still lags
Swiggy's revenue rose 35% in FY25 to ₹15,275 crore, according to its annual report. But higher sales failed to contain mounting losses, which widened to ₹3,117 crore from ₹2,348 crore the previous year. Since listing in November 2024, the company's shares have declined over 41% and continue to trade below their IPO price.
By contrast, Eternal has seen its stock climb more than 55% since the start of FY26, despite a sharp drop in quarterly profit to ₹25 crore. Investors have remained upbeat on Eternal, crediting its ability to scale Blinkit without significantly expanding losses. Increased advertising revenue has also helped offset delivery costs.
According to Elara Capital, Swiggy still has ground to cover. Investors are closely watching how quickly the company can reduce cash burn, particularly in Instamart, which remains a key drag on overall profitability.
Leadership shake-up and new verticals
Swiggy underwent notable leadership churn in FY25, with five senior executives exiting and three key hires joining during the year.
Among them was Ankit Jain, a former Flipkart executive, who took over as senior vice president of Instamart in May. The leadership transition raises questions about the company's management stability as it works to rein in losses and scale new business lines.
While nearly 60% of Swiggy's FY25 revenue came from food delivery and 30% from Instamart, the company is betting on emerging verticals to support future profits. Ads, Dineout, ticketing, and newly launched platforms such as Snacc and Pyng contributed about 5% of revenue, with another 4% from other income sources. Though still small, these businesses will be closely watched for their potential to offset losses and diversify Swiggy's revenue base in the quarters ahead.