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# Swiggy Q2: Food Profit Peaks, Instamart Loses ₹895 Crore
- URL: https://www.moatmarginresearch.com/swiggy-q2-instamart-loss-food-margin/
- Published: 2026-10-23T01:42:31.000Z
- Updated: 2026-10-23T01:42:31.000Z
- Description: Swiggy's food delivery made a record ₹341 crore Adjusted EBITDA, but Instamart's loss rose to ₹895 crore as it chased growth. What the Q2 filings show.
- Author: A K Karthikeyan
- Tags: Moat Insights

**Swiggy's food-delivery business had its most profitable quarter yet: ₹341 crore of Adjusted EBITDA, 3.4% of what customers ordered. Its quick-commerce arm, Instamart, went the other way. It chose to spend for growth, its order value rose 13.4% in three months, and its Adjusted EBITDA loss widened to ₹895 crore from ₹778 crore in June. The company says that loss has now peaked. A day earlier, Eternal reported that Blinkit, three times Instamart's size, made a ₹184 crore profit.**

## The quarter in one table

| Q2 FY27, ₹ crore                  | Order value              | Growth on last year      | Adjusted EBITDA | Margin       |
| --------------------------------- | ------------------------ | ------------------------ | --------------- | ------------ |
| Food delivery                     | 10,054 (GOV)             | 17.7%                    | 341             | 3.4% of GOV  |
| Quick commerce (Instamart)        | 9,230 (GOV); 6,594 (NOV) | 31.4% (GOV); 34.8% (NOV) | –895            | –9.7% of GOV |
| Out-of-home consumption (Dineout) | 1,508 (GOV)              | 34.9%                    | n/a             | 0.5% of GOV  |
| **Consolidated**                  | 20,793 (B2C GOV)         | 24.6%                    | **–760**        |              |

Source: \[L\]. GOV is gross order value; NOV is GOV less all discounts.

On the reported numbers, revenue from operations was ₹7,571 crore, up 36.1% on ₹5,561 crore a year ago (our arithmetic), and the loss was ₹922 crore, against ₹1,092 crore a year ago and ₹791 crore in June (\[R\]).

## Food delivery: the profit engine

- **Record profit.** Adjusted EBITDA was ₹341 crore, up from ₹240 crore a year ago, a rise of 42% (our arithmetic), and from ₹292 crore in June (\[L\]).
- **Why margins rose.** The letter credits advertising, which lifted the take rate to 26.1%, and cheaper deliveries: "Bolt and 99-Store (collectively more than 25% of Food delivery volumes)" are short-distance, dense orders (\[L\]).
- **Growth.** GOV grew 17.7%; the letter says September grew over 20%, and it keeps its full-year guidance of 18–20% excluding Toing, its new budget-meals app (\[L\]).
- **Target.** The company repeats its "guidance of 5% steady state Adjusted EBITDA margin" for the business (\[L\]).

## Instamart: growth bought with margin

- **Faster growth.** NOV grew 13.4% from June, after 4% and 2.5% in the two quarters before. Orders reached 130.3 million and monthly users 14.8 million (\[L\]).
- **The cost.** The take rate fell 140 basis points in a quarter. The contribution margin, which had broken even in May, fell to –1.0% of GOV. The letter breaks this down as 100 basis points of "Targeted investments" in new and returning users, 40 points from mix, and 60 points of savings from busier stores (\[L\]).
- **The loss.** Adjusted EBITDA was –₹895 crore, ₹118 crore worse than June and ₹46 crore worse than a year ago (\[L\]). As a share of NOV, the measure Eternal uses for Blinkit, that is about –13.6% (our arithmetic).
- **Stores.** Instamart added 69 dark stores, as many as in the previous three quarters together, to reach 1,240\. Orders per store per day rose to 1,192 from 1,089 (\[L\]).

The letter's own verdict: "We believe the Adjusted EBITDA losses to have peaked out in Q2FY27." It expects Instamart's margin to improve by about 100 basis points of GOV in the December quarter (\[L\]).

## The gap with Blinkit

| Q2 FY27                  | Blinkit (Eternal) | Instamart (Swiggy) |
| ------------------------ | ----------------- | ------------------ |
| NOV, ₹ crore             | 20,940            | 6,594              |
| NOV growth on last year  | 79.3%             | 34.8%              |
| Adjusted EBITDA, ₹ crore | +184              | –895               |
| Stores                   | 2,751             | 1,240              |

Sources: \[E\], \[L\]. Blinkit's NOV is about 3.2 times Instamart's (our arithmetic).

Swiggy's letter spells out what it needs to break even in quick commerce: "\~2.3x today's scale (INR 60,000 Cr of annualised NOV, from INR 26,400 Cr today) and INR 30 of contribution per order." It says about two-thirds of that will come from earning more per order (product mix, own brands and advertising) and one-third from lower costs (\[L\]).

## Three changes coming

1. **Owning inventory.** Shareholders approved capping foreign ownership at 49.5%, so Instamart can qualify as Indian-owned and controlled and hold its own stock. Domestic ownership is now over 58%. The switch starts in mid-Q3 FY27, takes two to three quarters, and could add about 80 basis points to Instamart's contribution margin (\[L\]).
2. **Lower GST on delivery.** The letter says the 57th GST Council meeting proposed 5% GST, instead of 18%, on delivery services provided through e-commerce platforms by unregistered persons. The date depends on the official notification (\[L\]).
3. **Lynks sold.** Swiggy agreed in September to sell its B2B distribution arm, Lynks Logistics, to Udaan's parent for about ₹500 crore; with a separate ₹75 crore investment, it will hold about 3.2% of Udaan. Lynks leaves the reported numbers from Q3 FY27 (\[L\]).

## Moat and margin

**Focus moat: cost advantage from order density, in food delivery.** The filings support it there. Short-distance formats now make up more than a quarter of food volumes, and margins rose for the quarter even while Swiggy funded Toing.

**In quick commerce, the moat is not yet visible in the numbers.** Blinkit runs more than twice as many stores, sells about three times as much, and makes money; Instamart is spending to close the gap. The letter itself says: "Competitive intensity in the sector remains high, and we do not expect it to ease in the near-term" (\[L\]).

**Margin: up in food, down in quick commerce, down overall.** Consolidated Adjusted EBITDA was –₹760 crore, against –₹651 crore in June and –₹695 crore a year ago (\[L\]).

**MoatSCORE** (Moat Screener, first pass): Swiggy 5.16, AMBER+; for comparison, Eternal 5.12, AMBER+ (\[MS\]).

## The bear case

- **The losses are a choice, and the company can keep choosing them.** Swiggy calls the pricing investments "discretionary and transient", but competition, by its own account, will not ease soon.
- **Blinkit is pulling away.** It is growing faster from a base three times larger, and is already profitable.
- **Cash keeps falling.** The consolidated cash balance fell to ₹13,662 crore from ₹14,367 crore in June, after ₹708 crore of cash burn in the quarter (\[L\]).
- **A new spending line.** Toing sits inside Platform Innovations, whose Adjusted EBITDA loss rose to ₹162 crore from ₹46 crore a year ago (\[L\]).

## The case for

- **Food delivery funds the fight**, with record profit and rising margins.
- **Instamart's growth has returned**, with more users, better retention and busier stores.
- **Three margin levers are already in motion:** inventory ownership (about 80 basis points), lower GST on delivery, and the exit from Lynks.

## What to watch

1. Whether Instamart's loss falls in the December quarter, as the letter expects.
2. The take rate in quick commerce: does it recover once the pricing investments end?
3. The start of the inventory model in mid-Q3, and its effect on working capital.
4. The GST notification on delivery charges.

## Sources

- **\[L\]** [Swiggy, Q2 FY27 shareholders' letter](https://nsearchives.nseindia.com/corporate/SWIGGY%5F22102026155201%5FCovering%5FLetter%5FLetter%5Fto%5FShareholders%5FSigned.pdf) (NSE)
- **\[R\]** [Swiggy, unaudited results for the quarter ended 30 September 2026](https://nsearchives.nseindia.com/corporate/SWIGGY%5F22102026154451%5FSE%5Fintimation%5FFinancials%5FSigned.pdf) (NSE)
- **\[P\]** [Swiggy, Q2 FY27 press release](https://nsearchives.nseindia.com/corporate/SWIGGY%5F22102026155420%5FCovering%5FLetter%5FPress%5FRelease%5FSigned.pdf) (NSE)
- **\[E\]** [Eternal, Q2 FY27 shareholders' letter](https://nsearchives.nseindia.com/corporate/ZOMATO%5F21102026152512%5FSHLsigned.pdf) (NSE)
- **\[MS\]** [Moat & Margin, Moat Screener](https://www.moatmarginresearch.com/moat-screener/) and [How MoatSCORE works](https://www.moatmarginresearch.com/moatscore/)

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> Educational research, not investment advice. Every figure above is drawn from Swiggy's and Eternal's own filings, read from the primary documents on 23 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE read live from the Moat Screener on 23 October 2026\. No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.