Over the past three fiscal years, Swiggy has consistently reported losses on a consolidated basis. In FY22, the total income was ₹6,119.78 crore, with a net loss of ₹3,628.90 crore, followed by top and bottom line of ₹8,714.45 crore and minus ₹4,179.31 crore in FY23. However in FY24, the total income rose to ₹11,634.35 crore, while the net loss reduced to ₹2,350.24 crore.

“In the first quarter of FY25, ending on June 30, 2024, the company recorded a total income of ₹3,310.11 crore and a net loss of ₹611.01 crore. These figures indicate that the company has been experiencing continuous financial losses over the reported periods,” the report noted.

The report also highlighted that Swiggy reported an average earnings per share (EPS) of minus ₹14.90, and an average return on net worth (RoNW) of minus 35.39%. “The issue is priced at a price-to-book ratio (P/BV) of 11.60 based on its NAV of ₹33.61 as of June 30, 2024, and is at a P/BV of 7.31 based on its post-IPO NAV of ₹53.36 per share (at upper cap). If we attribute annualised FY25 earnings to post-IPO fully diluted equity base, then the asking price is at a negative P/E, and based on FY24 earnings also it is at a negative P/E, as the company has posted losses for the reported periods.”

Meanwhile, SBI Securities and Deven Choksey Research have given “SUBSCRIBE” recommendations to Swiggy IPO, while Capital Market has a "NEUTRAL" view on the issue.

SBI Securities has recommended investors to “SUBSCRIBE” the IPO for a long term investment perspective, saying that the issue appears to be “fairly priced”. “Swiggy, at an upper price band of ₹390, is valued at Price/Sales, EV/Sales and P/BV multiple of 7.8x/7.3x/7.1x respectively of its FY24 financials on post issue capital. While comparing with Zomato, the issue appears to be fairly priced on all these parameters.”

Deven Choksey Research has also assigned a ‘SUBSCRIBE’ rating, citing the company’s strengths and the projected growth of the online food delivery and quick commerce markets. “At the upper price band the company is valued at 8x Price to Sales, offering a 76% discount to its competition. Hence, we assign a ‘SUBSCRIBE’ rating.”

The Indian online food delivery market grew from ₹11,200 crore in CY18 to ₹64,000 crore in CY23 at a CAGR of about 42%. It is further expected to grow at a CAGR of 17%-22% between CY23-CY28P to reach ₹1,40,000-1,70,000 crore by CY28P. Of the total market in CY23, the share of top 60 cities (metro and Tier 1) is 75-80% which shows the large untapped potential beyond these cities which will drive growth as penetration of online food delivery increases. Growing availability of organized restaurant supply and increased online penetration is expected to drive growth in the online food delivery market beyond the top 60 cities.

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Brokerages report on Swiggy

Loss-making Swiggy’s ₹11,327 cr IPO ‘overvalued’: Brokerages