India's Swiggy quarterly loss narrows on food delivery gains, misses estimates (updated)

Eternal

Today 11:57

Updates with details throughout
Oct 22 (Reuters) - India's Swiggy SWIG.NS reported a narrower second-quarter loss on Thursday, helped by improving profitability in its food delivery business, although the result fell short of analyst expectations.
The quick-commerce and food delivery firm posted a consolidated net loss of 9.22 billion rupees ($97.24 million) for the quarter ended September 30, compared with a loss of 10.92 billion rupees a year earlier. Analysts had expected a loss of 7.92 billion rupees, according to data compiled by LSEG.
While the company's food delivery business reported a record adjusted core profit, losses at quick-commerce Instamart, which delivers everything from phones to groceries, widened as the company stepped up spending on pricing, customer acquisition and warehouse expansion.
Swiggy's revenue from operations rose 36.1% year-on-year to 75.71 billion rupees, beating analysts' estimate of 72.81 billion rupees, per LSEG data.
Its food delivery business reported adjusted core profit of 3.41 billion rupees, up from 2.40 billion rupees a year earlier, helped by higher advertising revenue and delivery efficiencies.
Instamart's adjusted core loss widened to 8.95 billion rupees from 8.49 billion rupees a year earlier, even as its net order value rose 34.8% to 65.94 billion rupees.
India's quick-commerce companies have been investing heavily in networks of small warehouses, known as dark stores, to meet rising demand for rapid deliveries of groceries and other products.
Swiggy added 69 net dark stores during the quarter, taking Instamart's network to 1,240 across 133 cities.  
Its contribution margin in quick commerce deteriorated to negative 1% of gross order value from negative 0.2% in the preceding quarter, reflecting spending on pricing and customer retention.
Rival Eternal's ETEA.NS Blinkit, meanwhile, added 308 net stores during the September quarter and said it planned to accelerate expansion without a near-term reduction in margins.  
($1 = 94.8175 Indian rupees)

(Reporting by Aishwarya Jain and Surbhi Misra in Bengaluru; Editing by Harikrishnan Nair)
((Aishwarya.Jain@thomsonreuters.com; Surbhi.Misra@thomsonreuters.com))