Diwali 2025: Swiggy shares – Company should now focus only on profitability and reducing cash outflows

On Diwali day, 20^th October, 2025, at 11 a.m. Swiggy’s share price is down by 1.27%, trading at Rs 426.65. Nifty 50 index is up by 0.51% at this time. Swiggy’s stock got listed in November 2024 at Rs 426.20. The stock price reached a high of Rs 597 in December last year. Then it fell sharply and continued its decline till April this year. Since May, the stock price has shown some gains. In the past 6 months, Swiggy’s share price has gained 23.95%. In this period Nifty 50 gained 7.11%. So the stock has outperformed the Nifty 50 index by around 16% in this period.

Zomato’s stock has outperformed Swiggy’s stock by a wide margin in the past 6 months

But in the same period of last 6 months, Eternal (Zomato) shares went up by more than 45%. So Swiggy’s stock has underperformed the stock of its main competitor by a wide margin in this period. The challenge before Swiggy is how to become profitable and stop the cash burn that it is facing currently. At the end of June quarter, net cash outflows of Swiggy averaged around Rs 3,000 crore per quarter. It had Rs 53,000 crore of cash on its balance sheet at the end of the quarter. Eternal has already turned profitable.

Swiggy’s business model

Swiggy earns its revenues from the 25%-30% commission that it charges from restaurants on every order that comes through its platform. It also charges a delivery fee from customers. Lately, Swiggy has also started charging a platform fee of Rs 15 per order. Swiggy also earns revenues from promotions that are done by restaurants on its platform. It also runs the quick commerce (QC) delivery business, Instamart.

The sources of revenue before Swiggy are many. How these revenue sources can be leveraged further to achieve profitability?

How to become profitable and cashflow positive

Swiggy enjoys a strong competitive position in the food delivery business. The discounts that are offered on Swiggy’s platform are often more than those offered on Zomato. So one option that Swiggy has is to reduce these discounts by some degree. This will help in reducing its losses and increasing its cash inflows. The company has already started taking steps in this direction. Generally, part of the costs of discounts are borne by restaurants and part by Swiggy.

A 1%-2% increase in commission that it charges from restaurants can also be used by the company for improving its cash flows. Given the high penetration that Swiggy enjoys and the large number of customers that use it, its bargaining power has increased vis-à-vis restaurants. Swiggy currently is present in more than 650 Indian cities. The company claims that it has more than 196,000 restaurant partners.

In the June quarter, Swiggy’s quick commerce business, Instamart, posted huge losses of around Rs 797 crore. The company has now decided to spin it off into a separate company. This new company will be a wholly owned subsidiary of Swiggy. This move may help the company in achieving efficiency at Instamart and reduce diseconomies of scale. This move is one in right direction.

Rapido stake sale will improve cash balance

Swiggy is selling its entire 12% stake in Rapido to Prosus and Westbridge capital for around Rs 2,400 crore. This is a good move by the company. It will help it in shoring up its cash balance.

Swiggy needs to become more efficient in every area of its business. It needs to identify areas where cost cutting can be done without compromising on customer service. The company should now focus only on achieving profitability and becoming cash flow positive. Expansion and revenue growth should be kept at the backburner for the time being.

If the company is able to do all this then its stock may prove to be quite a winner in the medium and long term.

Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.

Source: NSE