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Food and grocery-delivery firm Swiggy reported a 45% jump in operating revenue for fiscal year ended March 2023 to Rs 8,265 crore, even as its net loss expanded 15% to Rs 4,179 crore.
The Prosus-backed company, which is currently prepping for an initial public offering (IPO), spent heavily during the year under review on scaling up its quick-commerce vertical Instamart. Swiggy’s total expenses in FY23 came in at a staggering Rs 12,884 crore, up 34% on year, according to regulatory filings sourced from Tofler.
Other than purchase of stock-in-trade, advertising and promotional expenses were Swiggy’s biggest cost head. The firm’s marketing spend increased to Rs 2,362 crore, accounting for 28% of operating revenue during FY23, compared to 44% in FY22.
Bengaluru-based Swiggy’s employee benefit expenses also rose in FY23 to Rs 2,130 crore from Rs 1,708 crore in the year-ago period.
On January 25, ET reported that Swiggy, which currently employs between 5,500-6,000 people, is set to cut its workforce by 6% affecting 350-400 roles across teams like technology, call centre, and corporate roles.
This comes as the company looks at becoming leaner, while aiming to hit profitability in the run-up to its $1 billion-IPO.
Prior to this, in January last year, Swiggy had let go of 380 employees in a companywide restructuring exercise.
In May last year, Swiggy’s cofounder and chief executive Sriharsha Majety had said the company’s food-delivery business had turned profitable as of March 2023 after factoring in all corporate costs, excluding employee stock option costs.
Revenue profile
The company primarily derives revenue from online platform services that it provides to merchants such as restaurant, grocery merchants and delivery partners, in addition to streams such as advertisement services, sale of food and traded goods, subscriptions and other platform services.
In terms of revenue breakup, Swiggy’s earnings from sale of food and traded goods was Rs 3,352 crore for FY23, up 58% on year. Its revenue from sale of services – the bigger component of its topline – increased 39% on year to Rs 4,786 crore.
By comparison, Swiggy’s key rival, Zomato, reported consolidated operating revenue of Rs 7,079 crore in FY23, growing 69% year-on-year. The Gurugram-based company booked a net loss of Rs 971 crore for FY23, down from Rs 1,222 crore in FY22.
To be sure, Zomato and Swiggy compete on the food-delivery, quick-commerce and dining out segments. Swiggy provides parcel delivery services while Zomato operates business-to-business grocery supply vertical Hyperpure, and an event-ticketing business. In the first two quarters of the ongoing fiscal, Zomato turned profitable, booking a net profit of Rs 38 crore for the April-September period.
During FY23, Swiggy bought restaurant tech and dining out platform Dineout in an all-stock deal from Times Internet, the digital media arm of Bennett, Coleman and Company Ltd (Times Group) that publishes ET.
In the ongoing fiscal, according to Prosus – Swiggy’s largest shareholder – the company’s core food business grew 17% in the six months ended September 30, to a gross merchandise value (GMV) of $1.43 billion. Meanwhile, the quick-commerce business Instamart saw its GMV grow 63%.
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