Swiggy's Food Delivery Profit Falls Due to LPG Disruptions and Rising Costs

Swiggy's food delivery segment experienced a sequential decline in profitability during the first quarter of fiscal year 2027. The decrease was attributed to several factors, including restaurant order cancellations stemming from LPG supply disruptions, a typical seasonal slowdown in demand, and annual wage increases for staff.

Despite the profit dip, revenue from the food delivery segment grew 22.7% year-on-year to ₹2,208 crore ($265 million USD) in Q1 FY27. On a sequential basis, revenue increased by 6.5%. However, segment profit slipped 2.3% quarter-on-quarter to ₹299 crore ($36 million USD), although it surged 48% compared to the same period in the previous fiscal year.

The company reported that its gross order value (GOV) for food delivery grew 17.4% year-on-year to ₹9,490 crore. Swiggy stated that growth would have been closer to 18% if not for restaurant-driven cancellations caused by the LPG disruption early in the quarter. The number of monthly transacting users (MTUs) increased to 19.2 million.

Swiggy noted that the June quarter is typically weaker due to the monsoon season, and annual salary revisions also take effect during this period. Increased investments in ensuring delivery partner availability, coupled with wage hikes, further impacted profitability. The company reiterated its medium-term target of achieving a 5% adjusted EBITDA margin for the food delivery business.

The intensifying competition in the food delivery market, with players like Rapido and Flipkart planning expansions, was also addressed. Swiggy expressed confidence in its existing network, technology, and logistics infrastructure to maintain its competitive edge against new entrants.