Zomato vs. Swiggy: Which Performs Better in Lead-Up to IPO?

With Swiggy set to enter the stock market, how does it compare to Zomato? This detailed breakdown covers revenue, profitability, and future potential in India’s food delivery market.

As Swiggy gears up for its IPO on November 6, 2024, investors are curious about its performance relative to Zomato, which went public in 2021. Zomato reported its first quarterly profit in Q1 FY24, while Swiggy remains in a loss-making position. This comparison offers insights into both companies’ financials and strategic positioning in India’s competitive food delivery market.

Financial Comparison: Zomato vs. Swiggy

In FY21, as Zomato prepared for its IPO, it faced financial challenges, reporting substantial losses despite growth efforts. However, Zomato’s first-quarter FY24 profit marks a notable turnaround. Swiggy, in contrast, reported a steeper financial loss in Q1 FY24.

Year Company Revenue (₹ crore) Net Profit/(Loss) (₹ crore)
FY21 Zomato 1,994 (816)
FY21 Swiggy 2,547 (1,617)
FY24 (Q1) Zomato 12,114 351
FY24 (Q1) Swiggy 11,247 (2,350)

Zomato’s revenue rose significantly to ₹12,114 crore in FY24, a 71% increase over previous years. Swiggy’s revenue grew by 36%, reaching ₹11,247 crore, although losses remain high at ₹2,350 crore. Zomato’s positive earnings, while Swiggy faces increased losses, underscore Zomato’s stronger position ahead of Swiggy’s public debut.

Performance in Food Delivery and Quick Commerce

Brokerages like Motilal Oswal report that Zomato surpasses Swiggy in several critical metrics, including gross order value, profitability, and market share. Furthermore, Swiggy’s Instamart quick-commerce service lags behind Zomato-owned Blinkit in terms of revenue growth and efficiency.

FY24 Sector Comparison (₹ crore) Zomato Swiggy
Food Delivery Revenue 6,361 5,191.8
Quick Commerce Revenue 2,301 978.5

MUST READ: Swiggy’s ₹11,700 Cr IPO Set to Rival Zomato: Opening November 6

Outlook for Investors

Zomato’s financial resilience and market position give it a stronger foothold as Swiggy enters the market. With ongoing improvements, Zomato remains a competitive force in food delivery, while Swiggy’s IPO offers potential for long-term gains if it can improve profitability and market share. Swiggy’s quick-commerce focus with Instamart may eventually drive differentiation, though competition remains fierce.

Disclaimer: “This article is meant for informational purposes and should not be interpreted as financial advice.”