Analyst Concall
Swiggy sees deeper presence driving growth than expansion
This story was originally published at 21:07 IST on 9 May 2025
Register to read our real-time news.Informist, Friday, May 9, 2025
Please click here to read all liners published on this story
--Swiggy: Going forward, see capital expenditure reducing significantly
--CONTEXT: Swiggy management's comments in post-earnings call with analysts
--Swiggy: Seeing highest profitability in MegaPods
--Swiggy: Expect need for working capital to come down from coming quarter
--Swiggy: Spending by each customer is going up
--Swiggy: See signs of customer acquisition costs going down
--Swiggy: See deeper presence, not expansion to new cities, driving growth
By Sunil Raghu and Ashutosh Pati
AHMEDABAD/MUMBAI – The management of Swiggy Ltd. Friday said having a deeper presence in the cities it operates in is helping it drive growth better than expanding to new cities. The food delivery aggregator added 2.8 million monthly transacting users in the March quarter, more than it added in the last six quarters.
"We will continue to densify, especially in the tier one towns where typically when a store hits between two to two-and-a-half thousand orders," the management said in a call with analysts after Jan-Mar earnings announcement. They believe the company now has necessary footprint, both on the hyper-local level as well as from a geographical coverage perspective, to be able to add significantly more business to the existing store network.
Swiggy's quick commerce services are currently available in 124 cities. It also added 316 darkstores in the March quarter, much more than it cumulatively added in eight quarters, taking the overall tally to 1,021 stores as of Mar. 31. Swiggy also added 412 darkstores in the last six months, nearly 33% of which were added in 80 new cities, with remaining in metros where the company already had a presence and tier-I towns.
Among the darkstores, Swiggy is upbeat about megapods, stores larger than dark stores and capable of housing over 50,000 stock-keeping units. "Matured megapods, which have come up in places where they were already matured, it has actually the highest profitability for us," the company's management said.
All this expansion has seen an increase in its working capital investments and capital expenditure by INR 4.25 billion. The company now believes that a large part of the overall capex cycle that it started for this expansion is "behind" and would reduce in a "significant" way going forward. As for the working capital investments, the management said that there is some increase in number of outstanding with regards to advertising revenues that they collect from brands. This, they said, should "correct" in the next quarter, helping it bring down the need for working capital investments and reduce need for capex significantly.
On whether the talk by discretionary companies pointing to a general slowdown in the urban market was a cause of worry for Swiggy in FY26, the company management said that the "macro" is too volatile for them to talk about or get a clear read on the impact. "...we haven't seen as much of a slowdown has been talked about. We've already spoken about a 18% to 22% kind of year near growth guidance," the management added.
Further, the company said it is seeing signs of customer acquisition costs falling. "...because of competitive reason, the customer acquisition cost also went up. We have started to see some signs of that coming down. In the current quarter we are seeing better efficiencies in the customer acquisition side and if there normalcy will return, I think we should expect some bit of efficiencies there," the management said.
The management said it is also noticing a rise in spending by each customer. The company reported a consolidated net loss of INR 10.8 billion for the March quarter, 35% higher than that in the December quarter and much higher than INR 5.3 billion in the year-ago quarter. Its revenue from operations stood at INR 44.1 billion, up over 10% on quarter and nearly 45% on year. On Friday, shares of the company closed 0.7% lower at INR 313.10 on the National Stock Exchange. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
