Swiggy’s quick commerce arm Instamart posted an adjusted Ebitda loss of Rs 791 crore in Q3FY26, up from Rs 528 crore a year earlier, even as contribution margin improved 208 basis points year-on-year to negative 2.5% of gross order value (GOV). The widening losses reflect continued investments in network expansion and competitive spending that have overshadowed gains from better unit economics.
Battle of the Fee Waivers
The results come a week after rival Eternal’s Blinkit reported its first quarterly adjusted Ebitda profit of Rs 4 crore but warned that profitability would not follow a straight line due to competitive pressures. Swiggy CEO Sriharsha Majety described the current market scenario as “irrational”, making him the second to do so after Blinkit CEO Albinder Dhindsa last week.
Both companies are navigating an increasingly crowded market. Zepto was the first to aggressively cut minimum delivery thresholds (currently Rs 149), and waive off additional customer fees. Swiggy had responded by launching its own no-fee campaign above Rs 299 during the quarter, but management said this had “limited success due to continued irrationality in competitive activity,” adding that it expects to revert to a standard fee structure over the next two quarters. While Blinkit had largely stayed away from fee waivers, it recently reduced delivery fees in certain pincodes to protect market share.
Instamart added 34 dark stores during the quarter to reach 1,136 stores across 131 cities, with an average store size of 4,217 square feet. The network footprint now stands at 4.79 million square feet, though management said the existing network has capacity to serve over twice the current GOV.
GOV 103.2% year-on-year to Rs 7,938 crore, marking the fourth consecutive quarter of triple-digit growth. Net order value (NOV), which is GOV minus discounts, grew 76% year-on-year, and the highest in 7 quarters.
Beyond Groceries
Average order value rose 40% year-on-year to Rs 746, driven by non-grocery items such as electronics and jewellery, which now account for 32.2% of sales. The company processed 106.4 million orders during the quarter, up 45.4% year-on-year, while monthly transacting users grew 82% to 12.8 million. A quarter of Instamart’s stores are now contribution positive.
Management maintained its guidance of achieving contribution breakeven in Q2FY27, citing the company’s balance sheet as a strategic advantage. Swiggy ended the quarter with proforma cash of approximately Rs 15,900 crore following a Rs 10,000-crore institutional placement and the Rs 2,399-crore sale of its Rapido stake.
“The quick commerce category is only 25% done,” Majety said, adding that the company would focus on differentiated assortment rather than pricing to drive long-term market position even as near-term losses widen amid competitive spending.