Food delivery unicorn Swiggy is focusing on strengthening its position in India’s fast-growing quick commerce market and has a target to break even on the contribution margin between December and June next year, even as the ongoing sale event may hit profitability in the near term, according to a research note by JP Morgan.

Swiggy posted a contribution margin of -4.6% in the first quarter of FY26, improving by 97 basis points over the previous quarter. In a recent investor summit hosted by JP Morgan, Swiggy’s CFO Rahul Bothra said that the platform’s “Quick India Movement” sale event is designed to capture category growth, add new users, and cement consumer recall, even if it leads to near-term EBITDA burn.

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He added that the company is working to increase wallet share in spend per user and household consumption, while also boosting average order values (AOV) on its quick commerce arm, Instamart, through a wider assortment of SKUs and its Maxxsaver program. 

Instamart’s performance and the quick commerce race

Instamart currently holds the second-highest market share in quick commerce, following Blinkit and ahead of Zepto, according to several industry estimates. In Q1, Swiggy’s Instamart more than doubled its gross order value to Rs 5,655 crore, while increasing AOV by 16% quarter-on-quarter to Rs 612. In comparison, Blinkit’s net order value (NOV)  soared 127% year-on-year to Rs 9,203 crore in Q1, with an AOV of Rs 669.

Moderating competition and future growth levers

However, Bothra noted that competitive intensity in quick commerce has moderated compared to last year, but in the food delivery segment, there is a return of competitive intensity, particularly in subscription pricing. Nevertheless, he expects the food delivery business to maintain growth of 18–20% over the next 2-3 years, driven by more user additions and increased order frequency.

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The company has also densified its dark store network in top cities, which should sustain growth without the need for significant new store additions. After an aggressive darkstore expansion in the second half of FY25, with over 300 darkstores added in Q4 FY25, the company opted for measured growth in this financial year and grew its network by 41 new darkstores in Q1.

Looking ahead, Swiggy may pivot fully to an inventory-led model for Instamart once it secures majority domestic ownership.