Swiggy Q4 FY25: Rising Losses, But Revenue Growth Shows Hope for the Future

Introduction

Swiggy, India’s leading food delivery platform, has just released its Q4 FY25 results, and the numbers are a mixed bag. While the company’s net loss has nearly doubled, its revenue growth remains strong, leaving investors wondering about Swiggy’s path forward. Despite its rising losses, Swiggy's strong market position and revenue growth indicate that there might still be a bright future ahead.

In this blog, we’ll break down the key details of Swiggy's Q4 results, understand what’s driving its growth and losses, and discuss what this means for investors and the food delivery industry in India.

What Did Swiggy's Q4 FY25 Results Show?

1. Net Loss Doubles to ₹1,081 Crore

Swiggy reported a net loss of ₹1,081 crore for Q4 FY25, which is more than double the ₹540 crore loss it reported in the same quarter last year (Q4 FY24). This sharp increase in losses has raised concerns about the company’s financial health. The main reasons for this are:

• Higher Marketing Costs: Swiggy spent more on marketing to attract new customers and maintain its competitive edge. While necessary to stay ahead in a crowded market, this led to increased expenses.
• Increased Operational Costs: As Swiggy expanded its delivery network and services, costs for logistics and riders went up significantly. With more delivery partners and a wider geographical reach, the cost to operate has risen.

2. Revenue Growth: ₹7,800 Crore in FY25

Despite the mounting losses, Swiggy saw strong revenue growth in FY25. The company reported ₹7,800 crore in revenue for FY25, a 22% increase year-on-year. This growth came from two major sources:

• Food Delivery: With more people ordering food online, Swiggy’s core food delivery business continues to thrive.
• Instamart (Grocery Delivery): Swiggy’s grocery delivery service, Instamart, has been a game-changer, helping the company tap into the fast-growing quick commerce space.

This revenue growth shows that Swiggy’s business is still on track, even though it has not yet managed to turn a profit.

How Did the Stock Market React?

1. Stock Price Reaction

After the earnings report, Swiggy’s stock price showed resilience, with analysts cautiously optimistic about the company’s long-term prospects. While the rising losses are a concern, Swiggy’s solid revenue growth suggests that investors are willing to look past the short-term challenges.

In general, Swiggy’s stock price saw a slight increase, as investors seem to be betting on the company’s ability to scale and achieve profitability eventually.

2. Impact on the Food-Tech Industry

Swiggy’s performance also affects the broader food-tech sector, including competitors like Zomato. If Swiggy’s losses continue to rise, it could trigger price wars or increased pressure on other companies in the space. Additionally, investors may become more cautious about funding tech startups that haven’t yet reached profitability.

Key Sectors Driving Swiggy’s Growth

1. Food Delivery: Strong Demand Continues

Swiggy remains a dominant player in the food delivery sector. As more people prefer the convenience of ordering food from home, demand for delivery services continues to grow. Despite competition, Swiggy’s large customer base and efficient delivery network allow it to maintain market leadership.

2. Grocery Delivery (Instamart)

Swiggy’s foray into grocery delivery has proven successful, with Instamart gaining significant traction. As online grocery shopping continues to rise in India, Swiggy is well-positioned to capitalize on this trend. Revenue from Instamart grew by 35% in Q4 FY25, showing that the company’s expansion into new verticals is paying off.

3. Tech and Automation

Swiggy is investing in technology to reduce its operational costs. For instance, the company is using AI to optimize delivery routes and improve the efficiency of its riders. These technology-driven initiatives are expected to help Swiggy lower costs in the long run.

Why Swiggy’s Results Matter

1. Impact on Investor Sentiment

Swiggy’s financial results will influence investor sentiment in the tech and food delivery sectors. While the losses are concerning, Swiggy’s ability to grow revenue in a competitive market is a positive sign. For now, investors are focused on the company’s growth trajectory rather than short-term profitability.

2. Tech Sector Profitability Challenge

Swiggy’s struggles highlight a broader trend in the Indian tech sector, where many startups and established companies are finding it hard to balance growth and profitability. For investors, the key question is whether Swiggy can achieve profitability while continuing to scale its business.

3. Potential for Future Profitability

If Swiggy can improve its cost structure and maintain revenue growth, there is hope that it can eventually turn profitable. Analysts believe that the company’s expansion into grocery delivery and its investment in automation could help it achieve this goal.

What Experts Are Saying

1. Rohit Agarwal, Analyst at JM Financials

“Swiggy is in a tough spot, but its revenue growth is impressive. The company’s strategy of diversifying into grocery delivery and leveraging technology for efficiency could help it in the long run. However, cost control will be key to its future success.”

2. Sonal Varma, Nomura India

“Swiggy’s losses are concerning, but the company’s focus on growing revenue and expanding into new verticals gives it a lot of potential. Investors need to watch how the company handles its operational costs in the next few quarters.”

What’s Next for Swiggy?

1. Cost Control

Swiggy needs to find ways to reduce its costs, especially marketing and logistics. By optimizing its operations, the company can work towards narrowing its losses and improving its profitability.

2. Expanding New Services

Swiggy’s move into groceries and quick commerce could provide the growth it needs to reach profitability. The success of Instamart is a good indicator that these new services are on the right track, and the company will likely continue to invest in these areas.

3. Technology Investment

Swiggy’s use of AI and other technological innovations to streamline its operations is crucial for reducing costs. As the company invests in more efficient delivery systems and smarter customer service, it will likely see benefits in the long run.

Conclusion

Swiggy’s Q4 FY25 results paint a picture of a company that’s struggling with rising losses but still experiencing strong revenue growth. While the increased losses are concerning, Swiggy’s market position, strong revenue from food delivery and groceries, and long-term growth strategies keep investors hopeful.

The road to profitability for Swiggy is still unclear, but with its investments in technology and new services like Instamart, there’s hope that it can turn things around. For now, Swiggy remains a major player in the food delivery market, and its future growth prospects are something to watch closely.