Swiggy’s discount dilemma is back: Focus on growth or profitability?
Swiggy has returned to discount-led growth at Instamart, widening losses and raising fresh doubts about its profitability roadmap as Blinkit pulls further ahead.
- Oct 26, 2026,
- Updated Oct 26, 2026 3:51 PM IST
For most of the past year, Swiggy told investors that it would not compete on price in quick commerce. In January, CEO Sriharsha Majety told shareholders that Swiggy had chosen not to chase “deep-discount-driven, purely-volume-focused growth that sacrifices AOVs and margins”. In May, it said Instamart would be differentiation-led and not value- or price-led, and promised a path to profitability “without resorting to any short-term decisions”.
In the September quarter, however, it spent on price to revive growth. About 100 basis points of gross order value went into what management calls targeted investments, including a Rs 9 store and prices tailored to particular customer groups, to win back lapsed users and build ordering habits. Net order value rose 13.4% from the June quarter to Rs 6,594 crore, after growing just 2.5% in the previous quarter. But discounts, including those funded by brands, accounted for 29% of Instamart’s order value, up from 26% in the June quarter.
MUST READ | Why Swiggy wants to stop being called ‘foreign-controlled’
Instamart’s adjusted EBITDA loss widened to Rs 895 crore from Rs 778 crore in the June quarter. Its contribution margin, which Swiggy said had broken even in May, slipped back to minus 1% of gross order value. For a company that spent the past year telling investors it would not compete on price, this marks a change of course.
Another point worth noting is that Swiggy reports Instamart’s margins as a share of gross order value, which measures sales before discounts. On that basis, the adjusted EBITDA margin improved slightly, to minus 9.7% from minus 9.8%. Measured against net order value — what customers actually paid — Motilal Oswal calculates that it worsened, to minus 13.7% from minus 13.2%. For context, Eternal, which posted its September-quarter results a day before Swiggy, measures Blinkit’s margins against net order value. Blinkit’s adjusted EBITDA margin improved for the sixth consecutive quarter, to 0.9% of net order value.
Meanwhile, the gap with Blinkit continues to widen. Blinkit’s net order value grew 79% from a year earlier, to Rs 20,940 crore, while Instamart’s grew 35%. A year ago, Instamart was about 42% of Blinkit’s size; it is now 31%.
Blinkit has 37 million monthly transacting customers, compared with Instamart’s 14.8 million. Blinkit added 308 dark stores during the quarter, against Instamart’s 69, and earned Rs 184 crore in adjusted EBITDA while Instamart lost Rs 895 crore.
This is what spooked the markets. Swiggy’s stock fell more than 16% to close at Rs 176.70 in trading on Friday, after touching a record intraday low of Rs 174.90, while the benchmark Sensex slipped 0.17%. The stock has also lost more than 50% of its value since the company’s IPO in November 2024.
At first glance, Swiggy’s Q2 FY27 earnings look decent. Its net loss narrowed 16% from a year earlier to Rs 922 crore, while revenue from operations rose 36% to Rs 7,571 crore. More importantly, however, the loss was wider than the Rs 871 crore expected by analysts, Bloomberg reported.
Other income, mostly interest on cash, rose nearly 260% to Rs 212 crore from Rs 59 crore a year earlier, accounting for Rs 153 crore of the Rs 170 crore improvement in the net loss. At the adjusted EBITDA level, the loss widened to Rs 760 crore from Rs 695 crore, its widest in five quarters. Compared with the June quarter, revenue rose 11% and the net loss widened 17%.
Food delivery order value grew 17.7%, while revenue rose 22% to Rs 2,338 crore as the vertical posted its highest adjusted EBITDA profit yet, at Rs 341 crore. Platform Innovations—the segment that houses the budget food app Toing, among other bets — posted an adjusted EBITDA loss of Rs 162 crore, compared with Rs 46 crore a year earlier. Its revenue grew nearly ninefold to Rs 106 crore. By Swiggy’s own count, one in three new Toing users was already an active Swiggy customer, and the company acknowledges that the two apps have cannibalised each other’s demand. That is one reason food delivery growth slipped below the 18-20% range the company has guided for the year.
Swiggy says Instamart’s losses peaked this quarter and that the “discretionary and transient” spending will begin reversing over the next couple of quarters. The company also said Instamart would shift from a commission model to an inventory-led model beginning in the middle of the December quarter, a transition it expects to complete in two to three quarters. Swiggy estimates that the change will add about 80 basis points to contribution margin once it is complete.
DON'T MISS | Swiggy stock: JPMorgan maintains overweight call, cites growth in quick-commerce market
Swiggy has said that Instamart’s losses had peaked several times before. In July 2025, it told shareholders that Instamart had moved past its peak losses. Two quarters later, the unit posted its largest quarterly loss yet: Rs 908 crore. In the same letter, it told investors that “adjusted EBITDA losses will also see a sequential reduction from hereon, led by CM improvement and continued operating leverage”. Three quarters later, the loss stands at Rs 895 crore, and Swiggy is again saying the worst is over.
Even brokers with buy ratings on the stock are hedging. Motilal Oswal describes the December-quarter guidance as showing “only gradual QoQ improvement as losses are expected to remain stagnant”. For the second half, it expects the group’s adjusted EBITDA loss to rise to Rs 1,490 crore from Rs 1,360 crore a year earlier. “Concerns remain around Swiggy’s execution track record,” Bloomberg quoted Morgan Stanley analysts as writing in a note.
The brokers cannot agree on the direction either. Nirmal Bang, which rates Swiggy a buy, forecasts that the group’s reported EBITDA loss will shrink to Rs 244 crore in the December quarter from Rs 770 crore this quarter. Motilal Oswal, which also has a buy rating, forecasts that it will widen to Rs 958 crore. Nirmal Bang values Instamart at Rs 92 a share. Motilal says it “currently carries negative value”.
In July, after Instamart broke even at the contribution level, Satish Meena, founder of research firm Datum Intelligence, said it would be interesting to see whether Nandita Sinha, Instamart’s new chief executive, would focus on growth or profitability. The September-quarter results offer an indication.
“There is so much confusion about what Swiggy is trying to do with Instamart,” Meena says. “For most of last year, the message was profitability and no chasing discounts. Now it is spending on price again to revive growth.
Investors don’t know which Instamart they are backing, and you can see that in the way the stock is being treated.” In July, the question was whether Swiggy’s bet on curation could revive growth without undoing the economics it had spent five quarters rebuilding. Three months later, growth is back—and the economics have begun to slip.
The interest income that flattered this quarter’s loss is also shrinking. Swiggy’s cash balance fell by Rs 705 crore during the quarter, and less cash generates less interest. Nirmal Bang expects other income to fall to about Rs 165 crore in the December quarter and Rs 70 crore in the March quarter. Unless the business starts losing less, the headline loss will widen again.
For most of the past year, Swiggy told investors that it would not compete on price in quick commerce. In January, CEO Sriharsha Majety told shareholders that Swiggy had chosen not to chase “deep-discount-driven, purely-volume-focused growth that sacrifices AOVs and margins”. In May, it said Instamart would be differentiation-led and not value- or price-led, and promised a path to profitability “without resorting to any short-term decisions”.
In the September quarter, however, it spent on price to revive growth. About 100 basis points of gross order value went into what management calls targeted investments, including a Rs 9 store and prices tailored to particular customer groups, to win back lapsed users and build ordering habits. Net order value rose 13.4% from the June quarter to Rs 6,594 crore, after growing just 2.5% in the previous quarter. But discounts, including those funded by brands, accounted for 29% of Instamart’s order value, up from 26% in the June quarter.
MUST READ | Why Swiggy wants to stop being called ‘foreign-controlled’
Instamart’s adjusted EBITDA loss widened to Rs 895 crore from Rs 778 crore in the June quarter. Its contribution margin, which Swiggy said had broken even in May, slipped back to minus 1% of gross order value. For a company that spent the past year telling investors it would not compete on price, this marks a change of course.
Another point worth noting is that Swiggy reports Instamart’s margins as a share of gross order value, which measures sales before discounts. On that basis, the adjusted EBITDA margin improved slightly, to minus 9.7% from minus 9.8%. Measured against net order value — what customers actually paid — Motilal Oswal calculates that it worsened, to minus 13.7% from minus 13.2%. For context, Eternal, which posted its September-quarter results a day before Swiggy, measures Blinkit’s margins against net order value. Blinkit’s adjusted EBITDA margin improved for the sixth consecutive quarter, to 0.9% of net order value.
Meanwhile, the gap with Blinkit continues to widen. Blinkit’s net order value grew 79% from a year earlier, to Rs 20,940 crore, while Instamart’s grew 35%. A year ago, Instamart was about 42% of Blinkit’s size; it is now 31%.
Blinkit has 37 million monthly transacting customers, compared with Instamart’s 14.8 million. Blinkit added 308 dark stores during the quarter, against Instamart’s 69, and earned Rs 184 crore in adjusted EBITDA while Instamart lost Rs 895 crore.
This is what spooked the markets. Swiggy’s stock fell more than 16% to close at Rs 176.70 in trading on Friday, after touching a record intraday low of Rs 174.90, while the benchmark Sensex slipped 0.17%. The stock has also lost more than 50% of its value since the company’s IPO in November 2024.
At first glance, Swiggy’s Q2 FY27 earnings look decent. Its net loss narrowed 16% from a year earlier to Rs 922 crore, while revenue from operations rose 36% to Rs 7,571 crore. More importantly, however, the loss was wider than the Rs 871 crore expected by analysts, Bloomberg reported.
Other income, mostly interest on cash, rose nearly 260% to Rs 212 crore from Rs 59 crore a year earlier, accounting for Rs 153 crore of the Rs 170 crore improvement in the net loss. At the adjusted EBITDA level, the loss widened to Rs 760 crore from Rs 695 crore, its widest in five quarters. Compared with the June quarter, revenue rose 11% and the net loss widened 17%.
Food delivery order value grew 17.7%, while revenue rose 22% to Rs 2,338 crore as the vertical posted its highest adjusted EBITDA profit yet, at Rs 341 crore. Platform Innovations—the segment that houses the budget food app Toing, among other bets — posted an adjusted EBITDA loss of Rs 162 crore, compared with Rs 46 crore a year earlier. Its revenue grew nearly ninefold to Rs 106 crore. By Swiggy’s own count, one in three new Toing users was already an active Swiggy customer, and the company acknowledges that the two apps have cannibalised each other’s demand. That is one reason food delivery growth slipped below the 18-20% range the company has guided for the year.
Swiggy says Instamart’s losses peaked this quarter and that the “discretionary and transient” spending will begin reversing over the next couple of quarters. The company also said Instamart would shift from a commission model to an inventory-led model beginning in the middle of the December quarter, a transition it expects to complete in two to three quarters. Swiggy estimates that the change will add about 80 basis points to contribution margin once it is complete.
DON'T MISS | Swiggy stock: JPMorgan maintains overweight call, cites growth in quick-commerce market
Swiggy has said that Instamart’s losses had peaked several times before. In July 2025, it told shareholders that Instamart had moved past its peak losses. Two quarters later, the unit posted its largest quarterly loss yet: Rs 908 crore. In the same letter, it told investors that “adjusted EBITDA losses will also see a sequential reduction from hereon, led by CM improvement and continued operating leverage”. Three quarters later, the loss stands at Rs 895 crore, and Swiggy is again saying the worst is over.
Even brokers with buy ratings on the stock are hedging. Motilal Oswal describes the December-quarter guidance as showing “only gradual QoQ improvement as losses are expected to remain stagnant”. For the second half, it expects the group’s adjusted EBITDA loss to rise to Rs 1,490 crore from Rs 1,360 crore a year earlier. “Concerns remain around Swiggy’s execution track record,” Bloomberg quoted Morgan Stanley analysts as writing in a note.
The brokers cannot agree on the direction either. Nirmal Bang, which rates Swiggy a buy, forecasts that the group’s reported EBITDA loss will shrink to Rs 244 crore in the December quarter from Rs 770 crore this quarter. Motilal Oswal, which also has a buy rating, forecasts that it will widen to Rs 958 crore. Nirmal Bang values Instamart at Rs 92 a share. Motilal says it “currently carries negative value”.
In July, after Instamart broke even at the contribution level, Satish Meena, founder of research firm Datum Intelligence, said it would be interesting to see whether Nandita Sinha, Instamart’s new chief executive, would focus on growth or profitability. The September-quarter results offer an indication.
“There is so much confusion about what Swiggy is trying to do with Instamart,” Meena says. “For most of last year, the message was profitability and no chasing discounts. Now it is spending on price again to revive growth.
Investors don’t know which Instamart they are backing, and you can see that in the way the stock is being treated.” In July, the question was whether Swiggy’s bet on curation could revive growth without undoing the economics it had spent five quarters rebuilding. Three months later, growth is back—and the economics have begun to slip.
The interest income that flattered this quarter’s loss is also shrinking. Swiggy’s cash balance fell by Rs 705 crore during the quarter, and less cash generates less interest. Nirmal Bang expects other income to fall to about Rs 165 crore in the December quarter and Rs 70 crore in the March quarter. Unless the business starts losing less, the headline loss will widen again.