Food and grocery delivery platform, Swiggy on Friday reported a sharp 94.8% year-on-year increase in its net loss to Rs1,081.18 crore for the January–March quarter, significantly exceeding Bloomberg’s estimate of Rs 778 crore. The steep rise in losses was driven largely by heavy investments in its quick commerce arm, Instamart, as the company aggressively expanded its dark store network.
This widening of losses came despite a 44.8% increase in revenue from operations, which stood at Rs 4,410.01 crore, beating estimates of Rs 4,178 crore. However, expenses rose even more sharply, by 52.9% year-on-year to Rs 5,609.6 crore, undermining any benefit from the topline performance.
Total income grew 44.1% to Rs 4,530.7 crore during the quarter. Ebitda loss came in at Rs 962 crore, wider than Bloomberg’s estimate of a loss of Rs 733 crore.
Meanwhile, Zomato, Swiggy’s closest competitor, reported a 78% year-on-year decline in net profit to Rs 39 crore for the March quarter, while its revenue surged 64% to Rs 5,833 crore.
Swiggy’s biggest operational bet was on Instamart, which opened 316 new dark stores during the quarter, which was more than it had cumulatively launched in the previous eight quarters combined.
As of March-end, the platform operated 1,021 such stores. The company also focused on scaling up its larger-format stores, known as Megapods, with 44 opened in the past year. These now account for roughly 10% of Instamart’s total dark store area, which has expanded to four million square feet.
Instamart’s gross order value (GOV) doubled year-on-year to Rs 4,670 crore, representing a 101% increase. The average order value (AOV) rose 13.3% to Rs 527, but it still trailed Blinkit’s AOV of Rs 665. On an analyst call following the results, chief financial officer Rahul Bothra said that Swiggy expects “high-teen” growth in AOV in the upcoming quarters.
However, the surge in store openings weighed heavily on margins. Instamart’s contribution margin dropped to -5.6% during the quarter, down from -4.6% in the preceding quarter. Bothra attributed the decline to underutilised new stores and continued customer incentives amid growing competitive pressure. He added that the company expects the quick commerce business to reach contribution breakeven in three to five quarters, as most stores mature operationally.
The company now plans to moderate store expansion, shifting focus towards increasing order values, especially in tier-2 cities. In tier-1 cities, the densification strategy will continue, with additional store launches to reduce delivery time and cost.
In the core food delivery business, Swiggy reported a GOV of Rs 7,347 crore, marking a 17.6% year-on-year increase. The Ebitda margin rose by 236 basis points to 2.9%, with sequential Ebitda growth of 15.4%. Co-founder and CEO Sriharsha Majety stated that future growth in this segment would rely on customer innovation. He cited Swiggy’s recent initiative, Snacc, launched in January to deliver snacks from in-house kitchens, as a key example. Early user traction has been promising.
The company is also scaling Bolt, its 10-minute food delivery service, which operates within a 2-kilometre radius from partner restaurants. It is now active in over 500 cities, contributing to over 12% of food delivery orders. Swiggy believes Bolt’s higher-margin structure, due to reduced delivery costs, will help drive market share. In contrast, rival Zomato has shut down its similar offering, Quick.
Swiggy also reported strong growth in out-of-home consumption. Its dine-in segment’s GOV increased 41.6% year-on-year during the quarter, and the category turned profitable with an adjusted Ebitda margin of 0.3%. Majety said the Dineout business, integrated into Swiggy’s app post-acquisition, has seen a significant turnaround. Previously deep in the red, it is now contributing positively to margins.
Looking ahead, Swiggy expects its food delivery business to grow 18–22% in the medium term, even as it aims for margin improvements across both food and quick commerce divisions.