Instamart Expansion Weighs on Swiggy’s Margins as Net Loss Hits Rs 799 Crore

Swiggy, an online food and grocery delivery platform, released its fiscal third-quarter earnings report on Wednesday, revealing a 39% increase in net loss to Rs 799 crore. In comparison, the company had reported a net loss of Rs 574 crore during the same period last year (October–December).

The Bengaluru-based food delivery and quick commerce firm recorded a 31% increase in operating revenue for the fiscal third quarter, reporting Rs 3,993 crore in revenue for the October–December quarter.

Investments in Swiggy's quick commerce unit, Instamart, which faces intense competition from rivals Blinkit and Zepto, have negatively impacted the company's margin. The contribution margin for the quick commerce division dropped to -4.6% in the most recent quarter, down from -1.9% three months earlier, according to the company.

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Swiggy's Gross Order Value (GOV) rose by 38% year-on-year to Rs 12,165 crore. Meanwhile, the consolidated adjusted EBITDA loss decreased by nearly 2% year-on-year to Rs 490 crore, but increased by Rs 149 crore quarter-on-quarter. The platform's average Monthly Transacting Users (MTU) grew by 25.3% year-on-year to 17.8 million, with approximately one-third of all users engaging with more than one service on the platform.

The company's core food delivery business, which reported a topline of Rs 1,636 crore, saw a modest quarter-on-quarter growth of 3.7%, while recording a year-on-year increase of over 23%.

Swiggy’s Dineout operation achieved breakeven in December 2024. Since then, the company has expanded its dining and entertainment offerings with Swiggy Scenes.

“The secular expansion in food delivery margins and cash flow generation is balanced by growth investments in quick commerce, including the expansion of dark stores and marketing, amidst intense short-term competition,” said Sriharsha Majety, Managing Director and Group Chief Executive Officer, in a press statement.

Also Read: Swiggy Instamart to Launch Standalone App For Enhanced Consumer Experience

Instamart Expansion Cost

The company's expansion into the quick commerce segment has impacted the division's profitability. Swiggy Instamart, the company's quick commerce arm, added a total of 96 dark stores between October and December. In January 2025, the firm added another 86 outlets, while its MTUs grew to 9 million, according to the company's press release.

At the end of Q3 FY25, Swiggy operated a total of 705 dark stores, while Blinkit had a larger network with 1,007 dark stores, according to regulatory filings. Blinkit also outperformed Swiggy in revenue, reporting Rs 1,399 crore compared to Swiggy’s Rs 577 crore during the same period.