Industry Odisha Bureau, Oct 31: Affordable meal app shows early signs of attracting new users, but analysts question incremental demand.
Swiggy’s affordable meal app, Toing, is attracting new users but also sharp analyst scrutiny. The question is whether it can create incremental demand without hurting core profits. Food delivery is fiercely competitive, and customers watch prices closely.
Toing targets price-sensitive diners who may skip Swiggy’s main app over cost. In its September-quarter shareholder letter, Swiggy said Toing could lift combined marketplace growth. It pegged that growth at 25–30%, against 18–20% guidance for the core business. That is a management expectation, not achieved performance.
In an October 23 note, JM Financial saw no rationale for a separate Toing business. Toing, it argued, uses the same restaurants, delivery partners and overlapping customers. The brokerage flagged cannibalisation and cash burn. It recommended shutting Toing and redirecting resources to core food delivery. Swiggy has announced no such plan.
Swiggy’s Platform Innovations segment, which houses Toing, posted a ₹162 crore adjusted Ebitda loss. That loss widened from ₹131 crore in the June quarter. However, the segment includes other experiments, and Toing’s standalone numbers are undisclosed. Outsiders cannot isolate how much Toing alone is costing.
Swiggy points to encouraging early signs. Two in three Toing users were new to Swiggy or long inactive. Customers using both apps ordered about 25% more often than on either alone. These figures suggest wider reach and stronger engagement. Yet they do not prove incremental demand. Some orders may simply have moved from the main app. Swiggy admitted demand shifted between platforms in ways that were hard to predict.
The company also cited early business-market fit in Toing’s first cities. Unit economics have turned positive among repeat users there. Still, monetisation and costs need work. Swiggy expects clearer signals on scalability within one to two quarters.
Competition adds pressure. Eternal, which runs Zomato, reported food-delivery net order value of ₹11,445 crore. That was up 21.5%, with adjusted Ebitda rising 25% to ₹627 crore. Swiggy’s gross order value grew 17.7% to ₹10,054 crore. Its adjusted Ebitda rose to ₹341 crore from ₹240 crore. Its core business, excluding Toing, grew over 20%. The two companies use different metrics, so direct comparison needs care. CLSA said Swiggy must sustain operating gains to rebuild investor confidence.
New entrants Flipkart and Shiprocket are investing to win customers and boost frequency. Eternal CFO Akshant Goyal said competitive intensity rose in the September quarter. He added that Eternal itself was investing aggressively in growth.
Nomura still calls food delivery a cash cow for Swiggy. It expects ₹1,300–1,900 crore in Ebitda across FY27 and FY28. It kept a buy rating but cut its target to ₹300. Swiggy shares fell 4.8% to ₹176.60 in Friday afternoon trade, while the Sensex rose 0.49%.
Toing’s success will not rest on order volumes alone. It must create profitable, genuinely additional demand without weakening Swiggy’s main platform.
