Swiggy Delivered Double-Digit Revenue Growth in FY23, But IPO Hopes Hinge on Turning Red Ink Blue

Swiggy's net loss increased 15% YoY to Rs 4,179 crore during the fiscal 2023. As the food delivery giant bets big on its revenue growth, the critical question remains: Can Swiggy serve profits for investors?

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Swiggy, India’s online food and grocery-delivery company, has recently filed its financial statements for fiscal 2023, ending on March 31, 2023, and the results are noteworthy. The company reported an impressive 45% YoY growth in its operating revenue, amounting to Rs 8,265 crore in FY23. However, Swiggy’s net loss also increased a notable 15% YoY to Rs 4,179 crore during the same period.

In the arena of fierce competition, Swiggy’s rival, Zomato, demonstrated robust performance during the last fiscal year. Zomato’s operating revenue increased a strong 69% YoY to Rs 7,079 crore in FY23. What’s more interesting is that the Gurugram-based company’s adept management of expenses resulted in a 20.5% YoY decline in net loss, reducing from Rs 1,222 crore in FY22 to Rs 971 crore in FY23.

Swiggy’s revenue model encompasses diverse streams, including advertisement services, the sale of food and traded goods, subscriptions, and other platform services.

Breaking down its revenue for the fiscal year 2023, Swiggy’s revenue from the sale of food and traded goods increased a strong 58% YoY to Rs 3,352 crore, representing 40.6% of the total revenue.

Revenue from the sale of services accounted for a whopping 57.9% of Swiggy’s total operating revenue during FY23. This segment’s revenue grew a commendable 39% YoY to Rs 4,786 crore during the fiscal year.

Swiggy’s restaurant booking platform, Dineout, contributed Rs 77.5 crore in revenue in FY23; however, it also incurred an operating loss of Rs 176 crore during the financial year. Notably, Swiggy acquired Dineout through a slump sale in July 2022 for Rs 645 crore.

Swiggy Expenses FY23

As Swiggy, backed by Prosus, is currently gearing up for its initial public offering (IPO), the company strategically poured substantial investments into expanding its quick-commerce venture, Instamart, throughout the fiscal year 2023. During the period, Swiggy witnessed a notable 35% YoY surge in total expenses, reaching an impressive Rs 12,884 crore.

  • It is crucial to highlight that purchases of stock in trade made up more than 25% of Swiggy’s total expenses in FY23. These expenses increased 48% YoY to Rs 3,302 crore during the fiscal year.
  • Swggy’s employee benefit expenses accounted for 16.5% of the total expenses in FY23. These expenses grew 25% YoY to Rs 2,130 crore during the last fiscal year, emphasizing the company’s commitment to the well-being and compensation of its workforce.
  • Swiggy’s marketing efforts, including advertising and promotions, stood out as one of the major cost heads. The company’s marketing spending surged 28% YoY to Rs 2,362 crore, representing 18.3% of the total expenses during FY23.
  • Swiggy’s outsourcing support cost increased 34% YoY in FY23 to Rs 3,159 crore.

Layoffs at Swiggy

In a strategic cost-cutting move ahead of its anticipated $1 billion IPO, Swiggy is slated to reduce its staff by 6-7%, impacting approximately 350-400 roles across various teams, including technology, call center, and corporate functions. The company currently has 5,500-6,000 employees. This marks the second round of layoffs at Swiggy. In January 2023, the Bengaluru-based company had previously parted ways with 380 employees and shuttered its meat marketplace, all part of a concerted effort to streamline operations and reduce expenditures.

In a nutshell, Swiggy witnessed robust revenue growth across various segments in FY23 yet concurrently grappled with mounting expenses and the eventual challenge of achieving profitability. The company has been facing stiff competition from another powerhouse, Zomato, in India’s online food and grocery delivery market. The intriguing question now is whether the strategic layoffs and other implemented strategies pave the way for Swiggy’s journey toward profitability, with a successful IPO potentially shaping its future trajectory in the coming years.


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