Indian food and grocery delivery platform Swiggy on Thursday reported narrower second-quarter loss and improved margins, both sequentially, as strong growth in its quick commerce arm partly offset the still-high investments in the business.
The company's consolidated loss came in at 10.92 billion rupees ($124.24 million) in the three months ended September 30, compared to 11.97 billion rupees in the first quarter. However, the loss was wider than the year-ago quarter's 6.26 billion rupees.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin improved quarter-on-quarter to a negative 3.6% from a negative 4.7% in the previous quarter.
India's quick commerce industry, which promises to deliver everything from milk to mobile phones in 10 minutes, has ignited an investment frenzy as it grows at a blistering pace.
Swiggy's Instamart, Eternal's Blinkit and IPO-bound Zepto have emerged as the top players, jostling for market share by providing deep discounts, subsidising deliveries and rapidly expanding their warehouses.
The race has weighed on profitability for Eternal, with the pace of margin improvement disappointing analysts, and has led to ballooning losses for Swiggy, which indicated in May that absolute losses were set to decline gradually.
INSTAGROWTH
Instamart's revenue rose 21.6% to 9.8 billion rupees quarter-over-quarter, as gross order value - the total value of all orders - grew 24.2%. This pushed Swiggy's overall revenue 12.1% higher to 55.61 billion rupees.
Additionally, its EBITDA loss narrowed to 8.49 billion rupees from 8.96 billion rupees, and EBITDA margins improved by 375 basis points to negative 12.1%.
"We have improved speed (through a densified network), selection and value," Swiggy said in a letter to shareholders, adding that they opened 40 more 'dark stores' - small warehouses in densely populated neighbourhood buildings - in the second quarter, taking its overall store count to 1,102. The firm had added 41 dark stores in the previous quarter.
Revenue for Swiggy's namesake food delivery segment grew 6.8% on-quarter.
Separately, Swiggy said it will consider and approve raising funds not exceeding 100 billion rupees via public or private offerings in a board meeting on November 7.
