Swiggy's Q2 FY26 Losses Widen to Over INR 1,000 Cr, Instamart Drives Growth Amidst Investor Caution

In the second quarter of fiscal year 2026 (Q2 FY26), Swiggy's net losses widened by 74% year-on-year to surpass INR 1,000 Cr, though its revenue grew by 54% to INR 5,561 Cr. Sequentially, net loss decreased by 9% and revenue grew by 12%. The company's quick commerce service, Instamart, is increasingly contributing to revenue, now at nearly 18% compared to 13% last year, and is transitioning to an inventory-led model similar to competitors Blinkit and Zepto. Instamart has shown strong growth in Gross Order Value (GOV) and Average Order Value (AOV), even surpassing Blinkit's AOV recently, driven by an expanded product range beyond groceries. However, concerns persist regarding high discounting, delivery costs, and the profitability of its dark store network. JM Financial advises caution, estimating adjusted EBITDA breakeven for Instamart might not occur before FY29. Swiggy is undertaking a INR 10,000 Cr Qualified Institution Placement (QIP) which is crucial for shifting to an Indian-owned and controlled company status, a prerequisite for an inventory-led e-commerce model. Despite these efforts, Swiggy's shares saw a slight dip following the results and QIP announcement.

Impact: This news is significant for the Indian stock market and investors interested in the quick commerce and food delivery sectors. It highlights the challenges of achieving profitability in a competitive, high-growth market and signals potential shifts in business models and regulatory compliance that could affect future IPOs and existing market players. The cautious sentiment from analysts may influence investment decisions in related listed companies and the broader consumer tech space. Rating: 7/10.

Difficult Terms: Q2 FY26: This refers to the second quarter of the financial year 2026, typically from July to September. Net Losses: The amount by which a company's total expenses exceed its total revenue over a specific period. Revenue: The total income generated by the sale of goods or services related to the company's primary operations. Quick Commerce: A business model focused on delivering goods, typically groceries and essentials, very rapidly, often within 10-30 minutes of ordering. Inventory-led model: A business model where the company holds its own stock of products, managing inventory, warehousing, and logistics directly. Marketplace-based business model: A model where a platform connects buyers and sellers, but the platform itself does not hold inventory (e.g., Amazon Marketplace initially). Qualified Institution Placement (QIP): A method of raising capital by a listed company through the issue of shares or convertible securities to qualified institutional buyers, often used to meet regulatory requirements or fund expansion. Gross Order Value (GOV): The total value of all orders placed on a platform before accounting for discounts, returns, or cancellations. Average Order Value (AOV): The average amount spent by a customer per order. Net Order Value (NOV): The value of orders after discounts, returns, and cancellations are factored in. Stock Keeping Unit (SKU): A unique identifier for each distinct product and service that a retailer sells. Dark Store: A retail outlet that serves solely as a fulfillment center for online orders, not for walk-in customers. Megapod: Refers to larger, more optimized dark store facilities designed for efficiency and wider product assortment. Contribution Margin: The revenue generated by a product or service minus its variable costs. It indicates how much each unit sold contributes towards covering fixed costs and generating profit. Foreign-Owned-and-Controlled Company (FOCC): A company where ownership or control rests predominantly with foreign entities. Indian-Owned-and-Controlled Company (IOCC): A company where ownership or control rests predominantly with Indian entities. Foreign Institutional Investors (FIIs): Investment funds registered in a foreign country that are allowed to invest in a country's domestic market. IPO: Initial Public Offering, the process by which a private company first sells shares to the public. DRHP: Draft Red Herring Prospectus, a preliminary document filed with regulators before an IPO. OFS: Offer for Sale, a type of share sale where existing shareholders sell their stake in a company. Adjusted EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for certain non-recurring or extraordinary items, used as a measure of operating performance.