Food delivery platform Swiggy added 316 new darkstores in the fourth quarter, surpassing the cumulative number added in the previous eight quarters. This expansion brought the company’s total darkstore footprint to 1,021 stores by the end of March, reflecting a 45% quarter-over-quarter growth.
However, the platform’s contribution margin declined to -5.6% in Q4FY25, compared to -4.6% in the prior quarter. This drop was mainly driven by the underutilization of the newly expanded darkstores and higher customer incentives, particularly in new markets. Despite strong growth in other areas, these factors, along with significant investments in marketing and store expansion, impacted profitability.
Speaking about the dark store expansion, Instamart CEO Amitesh Jha said in the earnings call, “Regarding store growth, we look at expansion in two ways—how many new cities we enter and how deeply we penetrate those cities. Last quarter was more about widening our reach. Going forward, we’ll focus more on deepening in select cities based on performance feedback.” Jha also added that competitive intensity has increased, with both existing and new players becoming more aggressive.
Since new stores and customers take time to become profitable, the company had to spend a lot of money upfront. That’s why the company lowered their short-term profit target, or "margin," from 3.25% to 1.25%, to give themselves the room to keep investing in expansion, said Jha in the earnings call.
Now that they’ve covered more ground, Instamart plans to shift focus from just entering new cities to strengthening operations in the cities they’re already in, added Jha. Many of their stores are still new and will take around 6 to 12 months to become profitable.
The company believes the most expensive part of their growth is now behind them, and they expect to see better profits in the coming months as these stores mature and customer spending increases.
Swiggy's consolidated net loss widened to Rs 1,081.1 crore in Q4 of FY25, nearly doubling from Rs 554.7 crore in the same quarter last year, as per its exchange filing on May 9. Meanwhile, its revenue from operations rose by 44.8% year-on-year to Rs 4,410 crore, up from Rs 3,045.5 crore in Q4 FY24.
Simultaneously, Swiggy is doubling down on its 10-minute food delivery initiative, Bolt. The company announced that Bolt now operates in over 500 cities across India. Launched in October 2024, the company claims that Bolt has quickly gained traction in major cities as well as smaller towns, supported by a network of over 45,000 restaurant partners. In under six months, Bolt has come to account for more than 10% of all food orders fulfilled by Swiggy.
Rohit Kapoor, CEO of Swiggy’s food delivery business, said in the earnings call, “This category [Bolt] is emerging as a distinct one—not just in India, but globally. We're approaching it deliberately and strategically. The newer Bold orders are within our platform’s range, and there's no specific concern we have on the unit economics, though I can't share detailed comparisons.”
Meanwhile, Swiggy's main competitor, Zomato, reported a consolidated net profit of ₹39 crore for Q4 FY25, reflecting a 77% drop compared to the same quarter last year. The sharp decline was driven by a 63% surge in total expenses, which rose to ₹6,104 crore. Despite this, the company’s core food delivery vertical remained steady, recording a Gross Order Value (GOV) of ₹8,439 crore—a 6% sequential growth. The adjusted EBITDA margin for this segment stood at 5.7%.
Zomato CEO Deepinder Goyal commented that although the food delivery space has always been competitive, the intensity hasn’t changed recently. He mentioned that Zomato’s market share has remained stable and they are aiming to capture a larger share going forward. He also revealed the company has shut down its 15-minute delivery service, 'Quick', and its home-style meal delivery offering, 'Everyday'. Goyal explained that the existing restaurant network and kitchen setup were not ideal for 10-minute deliveries, leading to inconsistent user experiences. The 'Everyday' service was limited in appeal, mainly catering to office-goers in metro areas, and didn’t justify continuing at a small scale due to lack of returns.
The growing competitive pressure in this space was also highlighted by Blinkit CEO Albinder Dhindsa during an earnings call. He stated that increased market competition has hindered expected margin expansion. The presence of more players and heightened competition across product categories is making it difficult to raise delivery charges in certain areas and affecting the sales of higher-margin items.
