Are Swiggy Ltd latest results good or bad?

Swiggy Ltd's latest financial results for Q2 FY26 present a complex picture characterized by significant revenue growth alongside persistent operational challenges. The company reported net sales of ₹5,561 crores, reflecting a year-on-year growth of 54.43% and a quarter-on-quarter increase of 12.09%. This growth highlights Swiggy's aggressive strategy in capturing market share within the food delivery and quick commerce sectors.
However, the financial performance is overshadowed by a consolidated net loss of ₹1,092 crores, which represents a substantial increase in losses year-on-year, deteriorating by 74.44%. Although there was a slight improvement in the net loss compared to the previous quarter's loss of ₹1,197 crores, the absolute figures remain concerning, raising questions about the sustainability of the company's growth model.

In terms of operational efficiency, Swiggy's operating margin (excluding other income) improved to -14.35% from -19.23% in the previous quarter, indicating some progress in managing costs relative to revenue growth. Similarly, the PAT margin improved to -19.64% from -24.13%, suggesting better cost management strategies are being implemented. Despite these improvements, the overall financial health remains under scrutiny due to the ongoing cash burn and negative returns on equity, with the latest ROE reported at -42.59%.

The company continues to face significant challenges in achieving unit-level profitability, as evidenced by the negative operating profit before depreciation, interest, and tax, which stood at -₹798 crores. This indicates that while Swiggy is expanding its revenue base, the costs associated with this growth are substantial.

Swiggy's market capitalization of ₹89,821 crores positions it as a major player in the e-commerce sector, but the high valuation metrics, including a Price-to-Book ratio of 9.22x, reflect investor expectations for future profitability despite current losses. The recent trends suggest that while there is an adjustment in its evaluation, the path to sustainable profitability remains uncertain.

In summary, Swiggy Ltd's Q2 FY26 results illustrate a scenario of strong revenue growth juxtaposed with significant operational losses, raising critical questions about the company's long-term viability and profitability in a highly competitive market landscape.