Swiggy Q2 Results: Loss narrows YoY to Rs 922 crore; revenue jumps 36%

Sequential growth accelerated to 13.4% from 2.5% in the preceding quarter.Instamart's adjusted EBITDA loss widened to Rs 895 crore from Rs 849 crore a year earlier and Rs 778 crore in the June quarter, as the company stepped up investments to attract customers and improve order frequency.However, its adjusted EBITDA margin improved to negative 9.7% of GOV from negative 12.1% a year earlier. Contribution margin also improved to negative 1% from negative 2.6% over the same period.Swiggy added 69 net dark stores during the quarter, taking its network to 1,240 stores across 133 cities.

Monthly transacting users reached 14.8 million, up 23% year-on-year.The company said higher customer retention, targeted pricing initiatives and expansion of its product assortment helped accelerate growth. Management expects another quarter of double-digit sequential growth in Instamart's net order value during the December quarter, while projecting an improvement in operating margins.Food deliverySwiggy's core food delivery business continued to improve profitability, with GOV increasing 17.7% year-on-year to Rs 10,054 crore.

The segment reported its highest quarterly adjusted EBITDA of Rs 341 crore, up 42% from Rs 240 crore a year earlier.Adjusted EBITDA margin improved to 3.4% of GOV from 2.8%, helped by advertising revenue, higher order density and greater delivery efficiency.The food delivery business had 19.8 million monthly transacting users, compared with 17.2 million in the year-ago quarter.Swiggy said food delivery GOV growth exceeded 20% YoY in September, and retained its full-year growth guidance of 18-20% for its core food delivery business, excluding the Toing app.The company has been expanding Toing, its affordable food ordering platform, which is now available in more than 50 cities.

According to management, two-thirds of new Toing users are either new to Swiggy or customers who had been inactive for an extended period.Swiggy's out-of-home consumption business, which includes Dineout, reported a 35% year-on-year increase in GOV to Rs 1,508 crore. The business remained adjusted EBITDA-positive for the seventh consecutive quarter.Sriharsha Majety, Co-founder, MD and Group CEO of Swiggy, said the company's businesses grew faster during the quarter, supported by improving customer engagement and operating performance.The company expects Instamart's adjusted EBITDA losses to have peaked in the September quarter and sees scope for margin improvement as customer retention and store utilisation improve.Swiggy also announced that it had agreed to sell its Lynks Logistics business to Udaan's parent for a consideration of Rs 500 crore.

Along with a separate investment of Rs 75 crore, the transaction will give Swiggy a stake of around 3.2% in Udaan.The company's consolidated cash balance stood at Rs 13,662 crore at the end of September, compared with Rs 14,367 crore at the end of June.(You can now subscribe to our ETMarkets WhatsApp channel)