Swiggy Q2: Food Profit Peaks, Instamart Loses ₹895 Crore

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

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

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 (NSE)
• [R] Swiggy, unaudited results for the quarter ended 30 September 2026 (NSE)
• [P] Swiggy, Q2 FY27 press release (NSE)
• [E] Eternal, Q2 FY27 shareholders' letter (NSE)
• [MS] Moat & Margin, Moat Screener and How MoatSCORE works

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.