The benefit of market share in food distribution is encouraging; However, challenging macros continue to weigh the food distribution business, and Swiggi believes that despite recent consumption push may completely slow down growth.
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Motilal Oswal Report
Swiggy ltd. Q3 FY25 (11% QOQ) vs. gave a revenue of Rs 39.9 billion in our Rs 38.9 billion estimate. The gross order price of the food distribution business increased by 19.2% yoy, while the contribution margin was 7.4%, with an 80bp QOQ extension. Adjusting food delivery Ebitda Gov increased to 90 BP QOQ to 2.5 % as % of the margin.
The gov of Instamart was 39.0 billion (+88.1% yoy), which missed our estimate. The contribution margin took a dip from 270bp Qoq -4.6%. Adjusted Ebitda -14.8% (in Q2 -10.6%) adjusted as% of Gov, our estimate of -10.0% was missing.
Overall, Swiggi reported a net loss of Rs 8 billion, with an increase of 39% yoy.
For Q4 FY25, we expect revenue/adjusted Ebitda loss to increase 7.0%/14.5% QOQ. Our DCF-based assessment is potentially suggested to 10% of Rs 460 (Rs 520 earlier). We repeat our neutral ratings on the stock.
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