Swiggy Q4: Food Delivery Beats ‘LPG Crisis’ Fears But Instamart Cools Off

“The industry did take a hit, but we were able to hold on to growth,” Swiggy Food CEO Rohit Kapoor told Inc42 just hours after the company announced its Q4 earnings.

When the war in West Asia broke out and triggered the LPG crisis in India, the major anticipation was that food delivery would take a hit. Urban food delivery hubs such as Bengaluru, Pune, and Chennai, where restaurants are heavily dependent on commercial LPG cylinders, saw closures, and there were concerns that food delivery recovery would be hampered.

But defying market scepticism, like Kapoor said, Swiggy’s food delivery business remained steady through the quarter, with adjusted revenue rising 23% year-on-year to ₹2,304 Cr in Q4 FY26. Gross order value increased to ₹9,005 Cr from ₹7,347 Cr a year earlier, indicating that demand held up despite supply-side pressures.

Plus, sequentially too, loss declined 24.9% from ₹1,065 Cr.

“It was a combination of staying in sync with the restaurants, adjusting our working relationship with them, as well as on the consumer side, making sure that the consumer had enough choice, even though some restaurants may be unavailable at certain points in time or some cuisines may be unavailable,” Kapoor said about the improvements in the bottomline amid the crisis.

Having said that, he acknowledged that the restaurant ecosystem had been affected. “Overall, the industry did take a hit in terms of the restaurant industry, for sure,” he said, adding operational adjustments had to be made to hit for Swiggy to the growth and EBITDA targets.

Kapoor said it worked closely with restaurant partners to manage availability, while ensuring consumers continued to see sufficient options on the platform. The approach reflects how platforms are increasingly operating as intermediaries managing both supply and demand dynamics.

In our interaction, Kapoor indicated that the situation has since stabilised. “On that front, it has eased out a lot more… we probably will see that situation improve completely,” he said, and claimed that the broader geopolitical environment would dictate the numbers in the ongoing quarter.

Food Delivery Shows Resilience

Even as growth remained intact, the company reported incremental improvements in profitability. Contribution margin in food delivery rose from 7.6% to 7.8% during the quarter, while EBITDA margins also improved. Kapoor attributed this to a combination of operating leverage and a more targeted use of incentives.

At the same time, growth is becoming more measurable. Swiggy expects food delivery to expand at around 20% annually, indicating a shift from the earlier phase of rapid expansion to a more predictable trajectory. This is in line with the projections made by archrival Eternal’s Zomato.  

Operational factors continue to influence performance. Kapoor pointed to seasonal constraints, including summer heat, migration of delivery partners, and election-related travel, which can affect supply even when demand remains strong.

Alongside changes in pricing and incentives, Swiggy is also adjusting its approach to user growth. Eschewing heavy discounts, the focus turned to retention-led spending, with the management suggesting that demand is becoming less dependent on promotions.

The management said in the earnings call that the company is prioritising higher-value users over sheer scale. Some churn among lower-frequency or price-sensitive customers has been deliberate, with the focus shifting toward retention and engagement.

The company did not provide forward-looking user growth targets but indicated that improving frequency and order value remains a priority.

A Slow Quarter For Quick Commerce

While food delivery has remained steady, it seems that quick commerce growth has slowed down. The average order value for Swiggy Instamart declined to ₹700 from ₹746 from a quarter ago, as well as gross order value has also dropped ₹7881 Cr from ₹7,938 a quarter ago.

Swiggy said that it does not plan to chase growth through aggressive pricing, even as competition remains intense. Pricing right now in the market is at an irrational level, the company said, adding that it would not take the route of buying growth. Reaching contribution breakeven improves its ability to invest more selectively, with future growth expected to come from easing internal constraints rather than deeper discounting.

“The one thing that will happen after we reach a contribution margin breakeven is that any kind of headwind that we had created because we had to reach this CM-positive goal will eventually go away. And that will allow some more aspects of growth, which we continue to foresee happening from the next quarter onwards,” the company said about the Instamart vertical.

It is important to mention that Instamart contribution margin improvement from -5.6% to -1.8% over the last one year, while the company earlier set a target of contribution margin breakeven latest by Q1FY27.

Swiggy has significantly expanded its quick commerce infrastructure over the past year. The number of dark stores increased to 1,143 from 523 in the last two years, while the total area under these stores more than tripled. However, the company remained cautious in FY26 with only 122 store additions.

Swiggy has outlined a medium-term target of building a ₹1 lakh Cr business in the segment, with a margin profile of 4–5%. Achieving this will require balancing growth with cost discipline, particularly in a market where competitors continue to invest heavily.

Swiggy’s Experimental Playbook

Beyond food delivery and quick commerce, Swiggy is also experimenting with newer offerings such as “Scenes” and enhancements to its dining-out business.

These initiatives remain at an early stage, with management indicating that it is still evaluating their performance. “Very early days… we are watching some of the results,” Kapoor said.

For now, these efforts are not expected to have a significant impact on overall financials but represent potential avenues for future growth. In Q4, platform innovations which include private brands (led by Noice), Swiggy Genie, Swiggy Minis, Swiggy Sports, Snacc, Toing, Crew, had miniscule revenue, at ₹11 Cr.

Among these, Kapoor said Toing is gathering engagement among a particular target set of consumers who may be new to the food delivery category itself. “We ourselves are watching some of the results coming in and how the numbers are looking. I think we’ll probably be better prepared to give a more detailed external perspective on the line,” he added.

Bottomline Discipline Is A Factor

Looking ahead, Swiggy outlined a growth path that is ambitious in scale but measured in execution, with a clear emphasis on unit economics over aggressive expansion.

In food delivery, the outlook is more predictable. The company expects the business to grow at around 20% annually on an already large base, reflecting a steady, rather than hyper-growth, phase.

Meanwhile, newer verticals such as dining-out and Scenes are expected to grow at a faster pace, with management indicating year-on-year growth in the range of 40–45%. These segments, while smaller, are being positioned as complementary to the core business and potential drivers of engagement.

At the same time, Swiggy acknowledged that the competitive environment remains uncertain. Executives noted that several players in the market continue to operate at significantly negative contribution margins, making it difficult to predict when pricing discipline might return to the sector. As a result, the company’s approach is to focus on strengthening its own proposition rather than reacting to short-term market share shifts.

“There is a difference between short-term market share and long-term market share,” the management said, indicating that its priority is to build a more durable business even if that means forgoing near-term gains.

Taken together, the company’s outlook reflects a transition underway—not just for Swiggy, but for the broader quick commerce, food delivery and consumer services sector.

After a period defined by rapid expansion and heavy spending, the focus is shifting toward efficiency, profitability, and more sustainable growth. While the pace of expansion may moderate, the underlying ambition remains unchanged. The difference now lies in how Swiggy and Eternal are honing their approach to unlock profitable growth, and not growth by itself.

[Edited by Nikhil Subramaniam]

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