Swiggy announced its Q1 earnings, reporting a widening of net losses to Rs 1,197 crore, compared to Rs 611 crore in the year-ago period. Revenue from operations for the reporting period rose 54% YoY to Rs 4,961 crore.
Swiggy’s take on competition and four key business metrics:
1) Rapido conflict & competition
Swiggy acknowledged the evolving competitive landscape of the food delivery space, where new players and business models frequently emerge. The company stated it is actively reviewing its investment in Rapido, in which it holds a 12% stake.”Rapido, one of our investee companies, has announced its intention to enter the food delivery space. Having scaled up from a bike-taxi player to a full-fledged mobility platform, Rapido is now the largest mobility player in India by rides and has been a disruptor in its space. As a shareholder, we are extremely pleased with their success and value creation, but we do acknowledge a potential conflict of interest that may arise in the future. Our stake has appreciated significantly since our investment (based on incoming interest), and we are actively re-evaluating our position due to these developments,” Swiggy said in a letter to shareholders.
The company added that it will continue rolling out new offerings to maintain its competitive edge. “If there’s a new model that can unlock incremental growth in the category, we will be super agile and make sure we participate quickly,” it said.
2) Dip in food delivery contribution and adjusted EBITDA margins
Q1 (April–June) is seasonally weak in terms of contribution margins due to higher delivery costs stemming from lower availability of delivery partners amid reverse migration and monsoons. This was the primary reason for the drop in contribution margins to 7.3% of Gross Order Value (GOV), down 43 bps QoQ. Adjusted EBITDA margins declined to 2.4%, down 52 bps QoQ.
The company also cited increased fixed expenses from the annual appraisal cycle, which raised manpower costs. A similar seasonal impact is expected every year. However, Swiggy emphasized that there is no structural change in the business’s unit economics.
3) Contribution margin break-even timeline
Swiggy maintained its earlier guidance of reaching contribution margin break-even in its Quick Commerce segment between Q3FY26 and Q1FY27. Contribution margins improved by 100 bps QoQ to 4.6% of GOV.
4) Instamart ramp-up
Instamart continued to expand its assortment by adding more categories to existing dark stores and increasing store sizes. The network grew moderately during Q1, with 41 new dark stores added, bringing the total to 1,062 across 127 cities. The dark store footprint reached 4.3 million sq. ft., with the average store size rising 4% QoQ to 4,045 sq. ft.
Swiggy’s Quick Commerce segment posted a loss of Rs 896 crore for the quarter, though adjusted EBITDA margin improved to -15.8% from -18.0%. The segment reported 108% YoY GOV growth to Rs 5,655 crore, up 21% QoQ.
5) Affordability initiatives
Affordability remains a major focus area for Swiggy. The company launched the 99-Store in early July, offering flat-priced meals at Rs 99 across 175+ cities. These meals are curated with popular restaurant partners to meet the demand for affordable, single-serve dishes and attract new users.
Other initiatives like PocketHero and CrazyDeals aim to help restaurant partners increase volumes while appealing to price-sensitive Gen-Z consumers.
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