Swiggy targets profit by FY26 on Instamart-led growth

Food and quick commerce platform Swiggy is eyeing overall profitability between December 2025 and June 2026, with its quick commerce vertical Instamart playing a central role in driving the turnaround. The firm made this clear during its Q1 FY26 earnings call with analysts and investors.

Instamart has demonstrated notable performance, with Gross Order Value (GOV) more than doubling (108% YoY). More importantly, the average order value (AOV) grew 26% YoY and 16% QoQ, surpassing internal guidance. The company attributed this to the success of its basket-building initiative, Maxxsaver, which incentivizes customers to consolidate their purchases.

Swiggy’s CFO Rahul Bothra reaffirmed that contribution losses for Instamart had peaked in the previous quarters, and the company has already improved contribution margins by 100 basis points sequentially. The firm expects an even steeper improvement in Q2 FY26. “We remain steadfast in our guidance to reach contribution margin neutrality between December and June quarters of calendar year 2026,” Bothra said.

Despite Instamart’s rapid expansion Swiggy added over 316 stores in Q4 FY25. The company believes its current network of 4.3 million sq. ft. is sufficient to sustain 100% growth without major additions. It will now focus on deepening operations in existing geographies rather than expanding into new cities.

Interestingly, non-grocery selection on Instamart, which comprised 6.6% of the mix a year ago, now contributes 18.5%, showing strong traction in higher-ticket items. Though the company acknowledged that higher delivery costs and marketing spends slightly offset margin gains, it remains optimistic about long-term monetization through seller commissions and advertising.

While Instamart drove much of the narrative, Swiggy's food delivery business also posted a healthy 18.8% YoY GOV growth. The company claims it maintains an industry-best service time, with initiatives like Swiggy Bolt (its 10-minute delivery model) contributing over 10% of order volume. Swiggy continues to invest in Bolt and SNACC (its experimental cloud kitchen brand), though losses under the “platform innovations” category widened during the quarter.

On the cash front, Swiggy holds Rs 5,500 crore in reserves, thus ruled out the need for an equity raise and hinted at the planned exit from its stake in Rapido due to competitive overlap in the food delivery space.

Despite rising competition, especially in quick commerce, the management appeared unfazed. Chief executive Sriharsha Majety emphasized that Swiggy's delivery speed and customer experience remain strong, and the company sees no need to match peers on store density if it doesn’t affect service quality.

With a balanced strategy of consolidation, monetization, and selective reinvestment, Swiggy is betting that Instamart’s momentum will help it cross into the black in FY26.