Swiggy, the popular food delivery and quick commerce company, is set to launch its Initial Public Offering (IPO). The company has already filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The announcement of the Swiggy IPO has triggered comparisons between Swiggy and Zomato, its main competitor in the food delivery and quick commerce markets. Here’s a breakdown of the financial health and business performance of both companies in recent times.
Financial Performance: Swiggy vs Zomato in FY 2024
Swiggy and Zomato have both grown substantially over the years. However, their financial results for the fiscal year 2024 show key differences:
- Revenue Comparison: Swiggy’s total revenue for FY 2024 stood at ₹11,247.3 crore, whereas Zomato reported a slightly higher revenue of ₹12,114 crore.
- Profit vs Loss: While Zomato made a net profit of ₹351 crore in FY 2024, Swiggy reported a significant net loss of ₹2,350.2 crore.
- Cash Reserves: Swiggy had ₹5,446 crore in cash, while Zomato maintained a much larger cash reserve of ₹12,241 crore.
Despite Swiggy’s losses, the company remains hopeful that its upcoming IPO will strengthen its position in the market.
Q1 FY 2025: A Look at Swiggy and Zomato’s Early Results
The first quarter of FY 2025 provides insight into the performance of Swiggy and Zomato at the beginning of the year.
- Revenue and Losses: During this period, Swiggy earned ₹3,222.2 crores in revenue but experienced an EBITDA loss of ₹544.2 crore. On the other hand, Zomato generated a higher revenue of ₹4,206 crores and posted an EBITDA of ₹177 crores.
- Margins and Profitability: Zomato’s margin during this period was 0.3%, and the company made a profit of ₹253 crores. Swiggy’s margin data was not available, but the company incurred a net loss of ₹611 crores.
The comparison clearly shows that Zomato is currently performing better in terms of profitability, while Swiggy continues to face challenges in managing losses.
Food Delivery Business: Comparing Swiggy and Zomato’s Numbers
Swiggy and Zomato are the two major players in the Indian food delivery space. Here’s how they stacked up in FY 2024:
- Gross Order Value (GOV): Swiggy recorded a gross order value of ₹24,717.4 crores, while Zomato surpassed that with ₹32,223 crores.
- Monthly Users: Swiggy had 1.27 crore monthly active users, whereas Zomato had 1.9 crore, showing its wider customer base.
- Margins and Contribution: Swiggy’s contribution margin was 5.72%, while Zomato had a higher margin of 6.90%. In terms of operating efficiency, Zomato has been able to generate better returns.
- EBITDA Performance: Swiggy’s adjusted EBITDA for the year stood at ₹47.1 crore, compared to Zomato’s impressive ₹912 crore.
For Q1 FY 2025, Zomato continued to outperform Swiggy:
- Gross Order Value: Swiggy’s gross order value was ₹6,808.3 crore, while Zomato’s GOV stood at ₹9,264 crore.
- User Base Growth: Swiggy had 1.40 crore monthly active users, showing some growth, but Zomato still had a larger base at 2.03 crore.
- EBITDA Comparison: Swiggy’s adjusted EBITDA was ₹57.8 crore, while Zomato reported ₹313 crore during the same period.
The data highlights Zomato’s lead in both gross order value and profitability.
Quick Commerce: How Swiggy’s Instamart Stacks Up Against Zomato’s Blinkit
Quick commerce has become an essential service for both Swiggy and Zomato, offering fast delivery of groceries and essentials through Swiggy Instamart and Zomato’s Blinkit. Here’s a comparison of their performance in FY 2024:
- Gross Order Value: Swiggy Instamart’s gross order value was ₹8,068.5 crore, while Blinkit achieved ₹12,469 crore, showing a substantial lead for Zomato in this space.
- Contribution Margins: Swiggy’s Instamart faced a negative contribution margin of -6.01%, whereas Blinkit recorded a positive contribution margin of 2.13%. This indicates that while Swiggy is still struggling to turn a profit from its quick commerce service, Blinkit is already generating returns.
For Q1 FY 2025, the trend continued:
- Gross Order Value: Instamart’s gross order value was ₹2,724 crore, while Blinkit generated ₹4,923 crore.
- Dark Stores and Margins: Swiggy operated 557 dark stores, while Zomato’s Blinkit had 639. Additionally, Swiggy’s contribution margin improved slightly to -3.18%, but Zomato’s Blinkit continued its positive streak with a margin of 4%.
This comparison shows that Zomato’s Blinkit is far ahead in quick commerce both in terms of order volume and profitability.
Swiggy’s IPO and Fund Utilization
As Swiggy prepares for its IPO, the company has disclosed how it plans to use the funds.
- Repaying Loans: ₹137.4 crore will be used to repay loans, particularly to Scootsy.
- Instamart Expansion: ₹982.4 crore will be invested in expanding Instamart’s dark stores.
- Marketing and Promotion: ₹929.5 crore will go towards brand marketing and promotions to enhance Swiggy’s visibility in the market.
- Tech Development: ₹586 crores will be used for technology and cloud infrastructure, ensuring Swiggy remains competitive in the tech space.
With these investments, Swiggy aims to improve its operations and challenge Zomato’s lead in both the food delivery and quick commerce sectors.
Swiggy’s upcoming IPO will be a major event for investors and the market alike, but it will face tough competition from Zomato, which has already gained a solid lead in both food delivery and quick commerce.
