Is Swiggy (NSE:SWIGGY) A Risky Investment?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that Swiggy Limited (NSE:SWIGGY) does use debt in its business. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Swiggy's Net Debt?

As you can see below, at the end of March 2025, Swiggy had ₹17.0b of debt, up from ₹2.57b a year ago. Click the image for more detail. However, it does have ₹54.9b in cash offsetting this, leading to net cash of ₹37.9b.

A Look At Swiggy's Liabilities

According to the last reported balance sheet, Swiggy had liabilities of ₹35.9b due within 12 months, and liabilities of ₹14.0b due beyond 12 months. Offsetting this, it had ₹54.9b in cash and ₹28.7b in receivables that were due within 12 months. So it can boast ₹33.8b more liquid assets than total liabilities.

This short term liquidity is a sign that Swiggy could probably pay off its debt with ease, as its balance sheet is far from stretched. Succinctly put, Swiggy boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Swiggy can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for Swiggy

In the last year Swiggy wasn't profitable at an EBIT level, but managed to grow its revenue by 40%, to ₹170b. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is Swiggy?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And in the last year Swiggy had an earnings before interest and tax (EBIT) loss, truth be told. Indeed, in that time it burnt through ₹29b of cash and made a loss of ₹37b. But at least it has ₹37.9b on the balance sheet to spend on growth, near-term. Swiggy's revenue growth shone bright over the last year, so it may well be in a position to turn a profit in due course. By investing before those profits, shareholders take on more risk in the hope of bigger rewards. When we look at a riskier company, we like to check how their profits (or losses) are trending over time. Today, we're providing readers this interactive graph showing how Swiggy's profit, revenue, and operating cashflow have changed over the last few years.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.