Swiggy, one of India’s leading food and grocery delivery platforms, recently reported a record quarterly revenue of ₹4,961 crore for Q1 FY26. This marked an impressive 54% year-on-year growth. However, this strong revenue was overshadowed by a net loss of ₹1,197 crore—almost double the ₹611 crore loss in the same quarter last year.
The financial results highlight a significant gap between Swiggy’s growth in revenue and its ability to turn a profit. Understanding the reasons behind this loss requires a close look at its different business segments, rising costs, and overall strategy.
Swiggy’s revenue reached its highest level yet, driven by growth across food delivery and its quick commerce arm, Instamart. However, the loss widened because the cost of running the business increased faster than its earnings.
The company’s operating expenses jumped by 60% to ₹6,244 crore. This rise was mainly due to higher delivery costs, aggressive marketing campaigns, warehouse expenses for quick commerce, and employee-related payouts, including stock-based compensation after its IPO.
In simple terms, Swiggy is earning more than ever, but it is also spending far more to maintain and grow its market presence.
Swiggy’s business has two major pillars: the traditional food delivery segment and its quick commerce vertical, Instamart.
Food delivery remains Swiggy’s core business and the only segment that currently generates a profit. This segment earned ₹1,799 crore in revenue during the quarter, growing about 19% from last year.
Even though the segment was profitable, it could not offset the heavy losses from other parts of the business. Food delivery now contributes roughly 36% of Swiggy’s total revenue. The segment continues to benefit from increased orders, higher average order values, and a loyal user base.
Instamart, Swiggy’s quick commerce service, delivers groceries and daily essentials within minutes. This vertical recorded ₹806 crore in revenue, which is more than double the ₹374 crore from last year.
However, this growth came at a steep cost. Instamart posted a massive loss of ₹797 crore in the same period, making it the primary reason behind the company’s overall loss. The expenses come from operating dark stores, maintaining inventory, paying delivery partners, and offering discounts to attract customers.
Although losses are high, there are signs of gradual improvement. Swiggy reported that the average order value increased by over 25% year-on-year, suggesting that users are placing bigger orders. If order frequency and efficiency continue to improve, the losses could start to narrow in future quarters.
The main reason Swiggy is losing money despite higher revenue is the surge in costs:
Delivery Costs: Swiggy spent ₹1,313 crore on delivery-related expenses, up 63% from last year. This includes payments to delivery partners and fuel-related costs.
Marketing and Promotions: To compete in a crowded market, Swiggy doubled its spending on marketing to ₹1,036 crore. The company offers discounts and cashback to attract new users and retain existing ones.
Employee and Logistics Costs: Swiggy is hiring more employees and investing heavily in warehouses, technology, and logistics for its quick commerce and supply chain operations.
The combination of these rising expenses and the heavy investments in Instamart has pushed the company deeper into loss territory.
The delivery market in India has become more competitive than ever. Swiggy faces stiff rivalry from Zomato in food delivery and from Blinkit, Zepto, and BigBasket in the quick commerce space.
To stay competitive, Swiggy is forced to offer frequent discounts and maintain a large delivery network. This strategy helps capture market share but puts pressure on profitability.
While Zomato has recently managed to report small profits, Swiggy is still chasing breakeven because its quick commerce investments are much larger and costlier.
Swiggy recently raised over ₹4,300 crore through its initial public offering. Investors expected this cash injection to speed up its path to profitability. However, the funds have mainly gone into expansion, marketing, and employee stock option plans, rather than reducing overall losses.
Management has indicated that the first quarter of FY26 might represent the peak of losses in quick commerce. The company expects margins to improve gradually as order volumes rise and operational efficiency increases.
Brokerages and analysts suggest that Swiggy can achieve profitability if it slows down its rapid expansion, focuses on larger basket orders, and controls marketing spending. But this will require a careful balance between growth and financial discipline.
The coming quarters will be critical for Swiggy. Some positive indicators include:
Food delivery continues to generate profits.
Average order values in Instamart are rising.
Sequential improvement in quick commerce margins hints that the worst losses may be behind.
However, the company still faces a long road to profitability. Quick commerce remains a cash-burning business, and competition shows no signs of slowing down. Swiggy will need to focus on operational efficiency, reduce unnecessary costs, and possibly slow down its expansion in non-core areas.
Swiggy’s ₹1,197 crore loss despite record revenue highlights the challenge of balancing rapid growth with financial stability. Food delivery provides a solid foundation, but the high-cost quick commerce business is dragging the company into deep losses.
The strategy of investing heavily in market capture has boosted revenue and user growth but at the expense of profitability. To win the long game, Swiggy will have to tighten spending, improve efficiency, and turn Instamart from a high-burn venture into a sustainable business.
Until that happens, the company may continue to post impressive revenue numbers without translating them into net profits.