Food delivery giant Swiggy is soon to make its stock market debut, posing tough competition for the incumbent Zomato. The price band for the IPO, which is set to kick off on November 6, has been fixed in the range of  ₹371 to ₹390 per equity share.

Benzinga analysed the performance of the companies prior to their stock market listings. We looked at the financial performance of both firms in 2021, when Zomato filed for its IPO, and again in 2024, just before Swiggy’s anticipated listing.

Zomato clocked in its first profit in the first quarter of FY24 whereas Swiggy continues to be loss making, according to data from its red herring prospectus.

In 2021, as Zomato was gearing up for its IPO, the company faced considerable financial challenges, reporting substantial losses. During the fiscal year 2021, Zomato’s revenue fell by 23% year on year to ₹1,994 crore.

Despite efforts to improve its financial situation, the company’s losses remained significant, though they reduced by 66% compared to the previous year, the company lost ₹816 crore.

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In contrast, Swiggy logged a more pronounced decline in its financial performance during the fiscal year 2021. The company generated a revenue of ₹2,547 crore. The revenue, although higher than Zomato’s, represented a 27% year-on-year fall. The significant drop in revenue was accompanied by even larger losses, which amounted to ₹1,617 crore.

Fast forward to the fiscal year 2024, and Zomato has significantly outperformed its competitor Swiggy in terms of growth and financial results. For the entire year, Zomato reported an impressive 71% increase in revenue, bringing its total to ₹12,114 crore. Zomato also marked a significant milestone, as the company achieved its first annual profit totalling ₹351 crore.

In stark contrast, its arch-rival Swiggy experienced a rather modest revenue increase of 36%, reaching ₹11,247 crore for the fiscal year.

Despite this growth, Swiggy's financial situation remains challenging as it continues to grapple with substantial losses, which amounted to ₹2,350 crore. This represents a notable difference of around ₹2,000 crore in losses when compared to Zomato.

Moreover, brokerages indicate that Zomato is outperforming Swiggy in multiple areas beyond just revenue. According to Motilal Oswal, Zomato surpasses Swiggy in gross order value, profitability, and market share.

Elara Capital pointed out that Swiggy’s quick commerce service, Instamart, trails behind Blinkit in several key metrics, including revenue growth and take rates. The analysis suggests Zomato is solidly positioned against Swiggy across various performance indicators ahead of its anticipated market debut.

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