Earnings Outlook
Swiggy's Q1 loss to narrow but Instamart drag to continue
This story was originally published at 20:53 IST on 30 July 2025
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By Narayana Krishna
HYDERABAD - Costs on aggressive store expansion are likely to hit Swiggy Ltd.'s profitability in the June quarter despite growth in revenue, according to brokerages. The company is expected to outperform peer Eternal Ltd., the owner of Zomato-brand, in terms of revenue growth.
Swiggy's consolidated net loss is expected to shrink to INR 9.74 billion in the June quarter from a loss of INR 10.81 billion a quarter ago, according to an average of estimates from five brokerages. The company's revenue is seen up 11% quarter-on-quarter to INR 48.95 billion, according to the estimates. Swiggy had reported a consolidated net loss of INR 10.81 billion on a revenue of INR 44.10 billion for the March quarter.
Swiggy operates food delivery services along with a quick commerce business under the Instamart brand.
Among the estimates, Kotak Institutional Equities has a less bleak outlook with the lowest loss estimate of INR 7.63 billion for the June quarter. The highest loss projection is INR 11.30 billion by JM Financial Institutional Securities Ltd. On revenues, HDFC Securities Ltd. has the lowest projection of INR 48.10 billion and JM Financial's estimate is the highest at INR 50.22 billion. The company is scheduled to announce its June quarter earnings Thursday.
According to Kotak, Swiggy is expected to report a robust consolidated revenue growth of 49% year-on-year in the June quarter, driven by strong performance in both its core food delivery and Instamart businesses.
The company's food delivery revenue is projected to rise 19% on year, taking its gross merchandise value to INR 81 billion. The food delivery segment is also expected to continue outperforming Zomato in growth for the third consecutive quarter, Kotak said. JM Financial projected that Swiggy's food delivery segment's gross order value would grow around 9% on a quarter-on-quarter basis due to seasonality.
For Instamart, Kotak expects 113% on-year growth in gross merchandise value and 129% on-year growth in revenue. JM Financial expects Swiggy to report 20% growth in Instamart's gross order value for the June quarter, driven by aggressive store expansion.
Kotak said Instamart's top line momentum remains strong but profitability is likely to remain under pressure due to high competitive intensity and continued cash burn across the quick commerce space. Swiggy's Instamart store count rose to 1,171 as of Jun. 30 from 1,021 as of Mar. 31.
On margins, Kotak expects the contribution margin — a key metric in the aggregator business — to decline 30 basis points quarter-on-quarter to 7.5%, primarily due to higher delivery costs linked to the monsoon season. This marks an improvement of 110 bps on year, supported by higher restaurant take-rates, platform fees, and advertising revenue, Kotak said.
The average of estimates from five brokerages pegs the earnings before interest, tax, depreciation and amortisation at INR 8.68 billion.
Analysts will keenly watch for growth in monthly transaction users, changing discount structure in food delivery, and growth in the quick commerce segment, as well as any management commentary on these. Shares of Swiggy have risen over 28% since the announcement of its March quarter earnings. Wednesday, the shares closed at INR 401.10 on the National Stock Exchange, down over 3%.
Of the seven research reports on the company available with Informist, six brokerages have a 'buy' or equivalent rating with an average target price of INR 505. One has a 'hold' rating with a target price of INR 350.
Following are the Apr-Jun earnings estimates for Swiggy based on reports from five brokerage firms in the descending order by the estimate of net loss:
Brokerage name | Net Sales | Net Loss | EBITDA |
| --in million rupees-- | ||
Kotak Institutional Equities | 48,115.00 | 7,632.00 | -6,118.00 |
HDFC Securities Ltd | 48,100.00 | 8,400.00 | -8,100.00 |
Anand Rathi Share and Stock Brokers Ltd | 49,273.00 | 10,148.00 | -- |
Motilal Oswal Financial Services Ltd | 49,063.00 | 11,239.00 | -10,622.00 |
JM Financial Institutional Securities Pvt Ltd | 50,215.00 | 11,299.00 | -9,901.00 |
Average | 48,953.20 | 9,743.60 | -8,685.25 |
End
Edited by Ashish Shirke
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