Even as Zomato has reported three consecutive quarters of profits, arch rival Swiggy is still mired in the red.
Swiggy has registered a loss $200 million (Rs. 1,660 crore) in the first 9 months of 2023, ET reports. This tidbit was revealed in an internal document, even as Swiggy is looking to list on the Indian stock markets by the end of the year. In comparison, Swiggy had reported a loss of $500 million (Rs. 4000 crore) in FY23.
Losses aren’t new to Swiggy — the company has made losses every single year since it was founded in 2014. In fact, Swiggy’s losses have been record breaking — in FY23, it was the highest loss making Indian unicorn.
But the company has been forced to pull up its socks with the performance of its only serious competitor, Zomato. In the first quarter of FY24, Zomato had reported its first-ever profit of Rs. 2 crore. It had followed it up with a profit of Rs. 36 crore the following quarter, and had then completed a hattrick, reporting a profit of Rs. 138 crore in the quarter that followed.
Amid all this, Swiggy is still mired deeply in the red. It, however, seems to be actively looking to cut costs. Swiggy had laid off hundreds of employees last year, and had exited some verticals, including its cloud kitchens business. The results seem to be showing — while Swiggy had reported a loss of Rs. 4,000 crore in FY23, given how it’s only registered losses of Rs. 1,600 crore in the first 9 months of FY24, it could end up nearly halving its losses compared to the previous financial year.
And Swiggy could need to display this financial prudence in the coming months — it’s looking to list on the stock markets, and it’ll likely be compared directly with Zomato, with which it enjoys a duopoly in India’s food delivery space. Zomato has now been profitable for a while, and has inched ahead of Swiggy even in terms of its topline. As such, Swiggy could need to quickly narrow its losses — and possibly end up being profitable — if it wishes to enjoy the favour that Zomato has found with stock market investors in the recent past.