# Swiggy’s Toing App Faces Profitability Scrutiny Amid Growth Concerns Analysts question if the affordable-meal platform drives incremental demand or merely cannibalizes core business. - **Source:** [mint - companies](https://www.livemint.com/rss/companies) - **Published:** 2026-10-31 - **Topic:** [Marketing](https://brifing.si/c/marketing) - **Original article:** - **On Brifing:** https://brifing.si/s/9fba276f-d872-4e94-b0db-8a158003b7c1 ## Strategic Launch of Toing Swiggy introduced Toing to capture price-sensitive consumers who avoid the main platform. The company aims to boost combined food-delivery growth to 25-30%, exceeding the 18-20% guidance for its core business. This initiative serves as a secondary channel to acquire new users and reactivate those who have been inactive for extended periods. ## Market Skepticism and Rationality Brokerages like JM Financial have questioned the rationale behind operating Toing as a separate entity. Since it utilizes the same delivery networks and restaurant partners as the core app, analysts fear it creates unnecessary operational complexity. Critics argue that the resources should be redirected toward strengthening the primary food-delivery business instead. ## Financial Performance and Losses Swiggy’s Platform Innovations segment, which houses Toing, reported an adjusted Ebitda loss of ₹162 crore in the September quarter. This figure increased from the ₹131 crore loss recorded in the June quarter. The company does not disclose standalone financials for Toing, making it difficult for investors to assess its specific contribution. ## User Engagement and Cannibalization Swiggy claims two out of three Toing users are either new or returning customers. Data shows that users ordering through both apps exhibit a 25% higher combined order frequency. However, the company acknowledged unpredictable demand shifts between platforms, raising concerns about whether this growth is truly incremental or simply cannibalizing existing sales. ## Unit Economics and Scalability The company noted early signs of business-market fit, with unit economics turning positive among repeat users in initial launch cities. Despite this, Swiggy admits that monetization and cost structures require further improvement. Management expects to gain greater clarity regarding the long-term scalability of the Toing model within the next two quarters. ## Competitive Landscape Pressure Swiggy faces intense execution pressure from Eternal Ltd, which operates Zomato. Eternal reported a net order value of ₹11,445 crore with a 25% rise in adjusted Ebitda. With new entrants like Flipkart and Shiprocket increasing investments, the competitive intensity in the food delivery sector has risen significantly over the past few months. ## Investor Sentiment and Valuation Despite concerns, Nomura maintains a buy rating on Swiggy, viewing the core food delivery business as a cash cow. They project the segment will generate between ₹1,300 and ₹1,900 crore in Ebitda for FY27 and FY28. Nevertheless, the company's shares recently fell 4.8% to ₹176.60, reflecting ongoing market caution regarding experimental initiatives. ## Future of Experimental Ventures The long-term viability of Toing depends on its ability to drive genuine market expansion without eroding core margins. Analysts emphasize that while new initiatives require time to mature, companies must remain prepared to discontinue models that fail to demonstrate clear financial sustainability. Success hinges on balancing aggressive growth with operational efficiency. ## Sources covering this story - https://www.livemint.com/companies/news/why-swiggy-s-toing-is-raising-questions-over-food-delivery-profitability-11793292907260.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._