Swiggy reports strong growth but signals end of aggressive expansion

Food delivery and quick commerce platform Swiggy is shifting its strategy after years of rapid growth. The food and grocery delivery platform said it will enter fiscal 2026 focused on improving operational efficiency and moving its newer businesses toward profitability, marking a sharp departure from the infrastructure-heavy playbook that defined its last two years.

The company reported a 30% reduction in its consolidated adjusted EBITDA loss, which narrowed to Rs 1,911 crore in the year ended March 2025 from Rs 2,760 crore the year before. Swiggy’s adjusted revenue rose 46% to Rs 9,028 crore, buoyed by gains in food delivery and a surge in order volume from its quick commerce arm, Instamart. Overall gross order value across all businesses grew to Rs 31,031 crore, up 47% from the previous year.

That momentum, however, was tempered by a message in the company’s annual report: the era of aggressive expansion is over. “FY26 will mark the start of the shift from infrastructure investment to infrastructure leverage in quick commerce,” Swiggy said, signalling its intent to focus on utilisation, not just growth.

Instamart remained one of the company’s fastest-growing businesses, with gross order value climbing 82% to Rs 14,683 crore and adjusted revenue more than doubling to Rs 3,811 crore. Order volumes reached 285 million, while average order value rose to Rs 514. 

The vertical posted an adjusted EBITDA loss of Rs 547 crore, narrowing its margin loss to 14.3% from 27.9% the previous year. Swiggy attributed much of the drag to store immaturity—more than half of its 1,021 dark stores, spread across 124 cities, are less than a year old and have yet to hit breakeven.

To correct that, the company plans to scale back new store openings in FY26 and instead focus on improving throughput, order density, and contribution margins in existing clusters. Swiggy expects several dense urban markets to reach breakeven over the next year, helped by cost optimisation and a greater share of high-margin, planned purchases such as monthly grocery top-ups and festive bundles.

A key part of that strategy involves Megapods—large-format dark stores that carry up to 50,000 stock-keeping units and are optimised for automation. Though they require higher upfront investment, these hubs now serve 20% of Instamart’s orders despite making up only 10% of its store footprint. Swiggy said it plans to improve SKU rationalisation and deploy more auto-picking and inventory forecasting tools to drive profitability.

Also Read

In the Zomato, Swiggy vs restaurants war, it's a fight to the last rupee

In contrast to the burn-heavy quick commerce business, Swiggy’s food delivery segment has turned the corner. The unit reported an adjusted EBITDA margin of 2% in FY25, a sharp improvement that management attributed to increased monetisation, operational tightening, and higher consumer frequency. Gross order value rose 24% to Rs 15,367 crore, and adjusted revenue climbed 31% to Rs 4,926 crore.

Much of the margin improvement came from advertising. Self-serve ad tools, now used by 65% of restaurant partners, helped lift average revenue per order. The company also leaned on loyalty programs like Swiggy One BLCK, which targets premium users with bundled benefits, and launched category-focused services such as Bolt for fast food and group ordering to encourage repeat usage while keeping delivery costs low.

While food delivery now acts as a steady source of cash flow, Swiggy’s newer bets remain a drag. Its innovation vertical, which includes offerings like Pyng (home services) and SNACC (quick delivery), posted Rs 75 crore in revenue and an equal Rs 75 crore in EBITDA losses during FY25.

As part of a broader reset, the company said it will subject all future product launches to a three-tier evaluation process—checking for product-market fit, commercial viability, and scalability—before further capital is committed. Past ventures such as Genie and Minis, which failed to meet these thresholds, have already been shuttered.

The company said its capital expenditure cycle has peaked. Going forward, investments will be focused on automation, dark store productivity, and improving customer retention through targeted marketing rather than physical expansion. Swiggy did not provide a timeline for company-wide profitability but outlined a phased approach: hold margins in food delivery, drive breakeven in key Instamart zones, and rationalise spending on experimental products.

Rival platforms are on similar paths. Zomato’s Blinkit unit has reached contribution-margin positivity and is pursuing measured growth, while Zepto is betting on its own large-format fulfilment model as it targets profitability in FY26.

After years of chasing scale, Swiggy now appears focused on making its sprawling logistics infrastructure financially sustainable. The company’s report signals that future gains will hinge less on how many cities it enters, and more on how well its model performs in those it already serves.