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When Swiggy entered India's online food delivery market back in 2014, it was the first one to solve the problem of getting a meal from a restaurant to a customer's doorstep. Zomato joined the race a year later in 2015. But over the years, Swiggy has taken a path that has made its business increasingly different from simply being a food-delivery marketplace. It started with food delivery in 2014 and gradually expanded into groceries, dining, supply chain and a string of smaller experiments. The company's food delivery business generated an operating revenue of ₹2,208 Cr in the June quarter of FY27 with an operating profit of ₹299 Cr in the quarter under review. However, overall, Swiggy recorded a loss of ₹791 Cr in Q1 FY27. Quick commerce was the biggest drag, with Instamart reporting an adjusted EBITDA loss of ₹778 Cr, despite generating ₹7,907 Cr in GOV. This is where Swiggy's business model gets interesting. Beyond the delivery and platform fees that form a similar revenue base for Zomato, Swiggy has built a core business that is increasingly generating profits, while continuing to invest in newer businesses that could widen its addressable market. The difference, however, is that Swiggy's food delivery business still continues to bring in most of the revenue while Zomato is now a part of Eternal and contributes only 15% of the total top line. The margins brought in by the food delivery business are being invested to fuel Swiggy's quick commerce bet and "platform innovations", which is a space to test new formats, price points and operating models. The Q1 FY27 earnings call makes that approach even clearer. Swiggy said it evaluates opportunities across pricing, formats and even separate apps, while trying to preserve the economics of its core platform. With food delivery and other established businesses providing an existing consumer base, technology stack and fulfillment network, the company can test new initiatives without building every capability from scratch. But before looking at what these newer bets could become, it is worth understanding the business that continues to anchor Swiggy's P&L. Swiggy's Food Delivery & Supply Chain: The Core That Pays The foodtech has two very different established businesses at the heart of its P&L: food delivery, and supply chain & distribution (SC&D). Let's decode the most popular segment first. At the most basic level, Swiggy earns from the restaurant, the consumer and the wider platform. Its food delivery revenue comprises pre-agreed commissions from restaurant partners, advertising revenue from restaurants, platform fees charged to users, and subscription revenue when it comes to food delivery. There is also a revenue that comes from offering business enablement solutions to the restaurant partners. Furthermore, Swiggy does not recognise user delivery charges passed on to delivery partners as part of its revenue. These charges are included in its separately defined gross revenue, net of applicable discounts. However, it takes "service charge" as revenue collected from users/delivery partners for use of technology platforms, which is also not disclosed. So, on a ₹500 food order, the customer's payment is split across the food value going to the restaurant, delivery-related amounts going to the delivery partner, discounts and fees, while Swiggy's recognised revenue comes from the monetisation streams it retains. Operationally, Swiggy's food delivery GOV grew 17.4% YoY to ₹9,490 Cr and monthly transacting users rose 17.8% YoY to 19.2 Mn in Q1 FY27, ultimately resulting in operating revenue of ₹2,208 Cr. The next question is how much of that monetisation survives after serving the orders. Swiggy answers this via contribution margin. Swiggy calculates food delivery contribution margin (CM) after deducting delivery and other charges, platform-funded discounts and other variable costs from adjusted revenue. In Q1 FY27, this margin stood at 7.6% of GOV. On the other hand, adjusted EBITDA is further calculated after deducting the operating cost, which stood at a 3.1% margin on GOV for the June quarter. The quarter, however, saw a sequential dip in food delivery's CM and adjusted EBITDA margin. This is where Swiggy's cost to achieve EBITDA profitability for food delivery is hidden. The management said that the sequential dip in food delivery margins was partly due to higher investment in delivery-partner availability and the annual wage hike. Meanwhile, the blame was also given to seasonality. At the same time, the company said improved take rates and operating leverage helped drive the 70-basis-point YoY improvement in adjusted EBITDA margin. This creates an interesting balancing act for Swiggy. More delivery partners available at the right time can improve the customer experience and support order growth. But keeping that capacity available also adds to costs. The business therefore has to grow order density fast enough for the additional orders to absorb those fulfilment costs. Interestingly, Swiggy's average transacting restaurant partners also declined QoQ to 2.6 Lakh from 2.8 Lakh earlier. Food delivery, however, is not Swiggy's largest revenue-generating segment. Its supply chain & distribution business reported ₹3,195 Cr in revenue in Q1 FY27, making it the biggest contributor to the company's revenue from operations for the quarter. SC&D works very differently from food delivery. It is an inventory-led B2B business through which Swiggy purchases products and distributes them to merchant partners. This makes the business much more revenue-heavy, but also brings a corresponding cost of purchasing the products that it distributes. However, revenue alone does not tell the full story of Swiggy's business mix — which we will see ahead. While these established businesses form the foundation of Swiggy's P&L, the company's biggest consumer growth bet is operating on a very different set of economics: Instamart. Instamart: The Growth Engine That Is Still Burning Instamart burning cash is hardly new for Swiggy. What has changed is the trajectory of that burn. In Q1 FY27, the quick commerce business reported GOV of ₹7,907 Cr, up 40% YoY and operating revenue of ₹1,232 Cr. Its adjusted EBITDA loss stood at ₹778 Cr (adjusted EBITDA margin at 9.8% of the GOV), declining by ₹80 Cr sequentially, even as the business continued to expand. The picture changes when we talk about Instamart's contribution margin, which improved to -0.2% of GOV, from -1.8% in the previous quarter. The difference between these two numbers is important to understanding where Instamart stands today. Swiggy said contribution margin had turned positive on a monthly basis in May, although the full-quarter margin remained at -0.2%. This means Instamart has almost reached order-level contribution break-even. Besides this, revenue per order rose to ₹108 from ₹97. More than 45% of its stores were contribution margin positive in Q1 FY27, with five of its seven largest cities also reaching positive contribution margins. Still, we cannot say that Instamart is closer to EBITDA profitability based on the CM improvement alone. The gap in CM and adjusted EBITDA profitability reflects the broader cost base of running and scaling the network. Instamart now operates 1,171 active dark stores with 1,089 orders per store per day in Q1 FY27. Yet Swiggy says the overall network is operating at only around 40% utilisation, with significant headroom remaining. At the same time, management expects to add around 75 stores in Q2 because of volume growth in high-growth neighbourhoods. The company is betting on transacting user base increase as well as frequency increase for Instamart's growth, Swiggy's chief financial officer Rahul Bothra said during Q1 earnings' call. And that growth will not only depend on how many people use Instamart, but also on what they buy, and how large their baskets become. Swiggy's Experimental Sandbox: Where Are The Bets Beyond Food Delivery, Instamart and its other established businesses, Swiggy has a separate platform innovations segment that acts as a sandbox for testing new consumer propositions and business models. The company describes it as a set of incubators aimed at creating more frequent and meaningful touchpoints with users. "Platform innovation by its nature is something that we are not committing ourselves fully to. As we have said, once the product hits both product market fit (PMF) as well as what we call business market fit (BMF), that is when it will get its growth capital, and it will have its own economics from there on," Bothra further said during the earnings' call. The portfolio under this head has changed quickly, with some experiments being launched, tested and discontinued. Toing, for instance, was launched as a separate offering targeting price-conscious consumers such as students and early-jobbers, using a different marketplace model for low-AOV meals. In the latest disclosures, Swiggy's CEO Sriharsha Majety said that Toing is different from conventional food delivery across delivery fees, proposition, cuisine, last mile, economics and the value proposition for consumers. The commission model around this product is also different as restaurants' fee is supposed to be low so that they can offer food at a lower price. Besides, Crew is another offering that Swiggy currently classifies under its platform innovations segment. Initially, the product allowed users to find, shop and get delivered anything "from golf course to caddy bookings to reliable and clean cabs, sourcing exclusive hotel rates to even a Hawaiian shirt". Earlier this month, the product pivoted to a "dedicated personal travel concierge offering". Apart from these, Swiggy also runs its sports subsidiary called Swiggy Sports and extensions of the food delivery services including Bolt, 99 Store, Late Night Eats, Food On Train, Eatright, and DeskEats. The portfolio also comes with the possibility of exits. Snacc, Swiggy's standalone food-delivery experiment, was shut in the previous quarter, and Bothra said some operating costs related to the closure were recognised in Q1 FY27. For now, this means the segment remains an investment pool for Swiggy, with the company absorbing the cost of testing whether these propositions can scale. Platform innovations reported ₹51 Cr in operating revenue against a segment loss of around ₹131 Cr in Q1 FY27. Swiggy does not disclose the individual revenue or cost contribution of Toing, Crew or its other experiments, making it difficult to attribute the segment's loss to any one product. At the same time, Bothra added that a larger portion of the investment in platform innovations during the quarter went towards Toing, particularly marketing-led customer acquisition. This is where Swiggy's Food Delivery profitability becomes important to the broader business model. The company has a mature business generating operating profit, while platform innovations continue to absorb investment as Swiggy tests new propositions. The strategy, therefore, is not simply to maximise revenue from every experiment today, but to use the existing platform and its economics to find businesses that can eventually stand on their own. The Price Of Swiggy's Scale Swiggy's expanding portfolio also comes with a sizable cost base. In Q1 FY27, the company reported ₹7,813 Cr in total expenses, against ₹6,812 Cr in revenue from operations. The biggest expense was purchases of stock-in-trade at ₹2,978 Cr. This is largely linked to Swiggy's supply chain & distribution business, where the company purchases products that are subsequently sold to its merchant partners. The SC&D segment generated ₹3,195 Cr in revenue in Q1 FY27, making it one of the largest businesses on Swiggy's books by revenue, even though the segment remained around break-even at the operating level. In comparison, food delivery generated a lower revenue pool than SC&D, but contributed ₹299 Cr in segment profit, while the much larger SC&D business operated with far thinner economics. The second-largest major cost was delivery and related charges at ₹1,750 Cr. This includes costs associated with the delivery network and therefore cuts across the businesses that rely on Swiggy's fulfilment infrastructure. It is also where the scale of Swiggy's operations becomes visible: the company is not only paying to acquire customers and build businesses, but also to keep the delivery network available to serve them. Advertising and sales promotion accounted for another ₹1,160 Cr during the quarter. This bucket is particularly relevant for a company still investing in new categories and consumer propositions. However, Swiggy does not provide a consolidated expense split that allows this amount to be attributed to a particular segment or product. Employee benefits added ₹662 Cr, while depreciation and amortisation stood at ₹298 Cr and finance costs at ₹53 Cr. The remaining ₹915 Cr was classified under other expenses. Taken together, these costs show that Swiggy's profitability challenge is broader than the losses from Instamart and platform innovations alone. The company is operating a large fulfillment, technology and employee base across multiple businesses, while continuing to invest in growth. That also explains why the profitability of individual businesses does not immediately translate into consolidated profits. Food Delivery generated a ₹299 Cr segment profit in Q1 FY27, but the wider portfolio continued to carry the costs of scaling quick commerce, running SC&D and incubating new businesses. The next question, therefore, is not just how much Swiggy spends, but where the company is willing to keep spending despite the losses. Edited By Nikhil Subramaniam
When Swiggy entered India's online food delivery market back in 2014, it was the first one to solve the problem of getting a meal from a restaurant to a customer's doorstep. Zomato joined the race a year later in 2015. But over the years, Swiggy has taken a path that has made its business increasingly different from simply being a food-delivery marketplace. It started with food delivery in 2014 and gradually expanded into groceries, dining, supply chain and a string of smaller experiments. The company's food delivery business generated an operating revenue of ₹2,208 Cr in the June quarter of FY27 with an operating profit of ₹299 Cr in the quarter under review. However, overall, Swiggy recorded a loss of ₹791 Cr in Q1 FY27. Quick commerce was the biggest drag, with Instamart reporting an adjusted EBITDA loss of ₹778 Cr, despite generating ₹7,907 Cr in GOV. This is where Swiggy's business model gets interesting. Beyond the delivery and platform fees that form a similar revenue base for Zomato, Swiggy has built a core business that is increasingly generating profits, while continuing to invest in newer businesses that could widen its addressable market. The difference, however, is that Swiggy's food delivery business still continues to bring in most of the revenue while Zomato is now a part of Eternal and contributes only 15% of the total top line. The margins brought in by the food delivery business are being invested to fuel Swiggy's quick commerce bet and "platform innovations", which is a space to test new formats, price points and operating models. The Q1 FY27 earnings call makes that approach even clearer. Swiggy said it evaluates opportunities across pricing, formats and even separate apps, while trying to preserve the economics of its core platform. With food delivery and other established businesses providing an existing consumer base, technology stack and fulfillment network, the company can test new initiatives without building every capability from scratch. But before looking at what these newer bets could become, it is worth understanding the business that continues to anchor Swiggy's P&L. Swiggy's Food Delivery & Supply Chain: The Core That Pays The foodtech has two very different established businesses at the heart of its P&L: food delivery, and supply chain & distribution (SC&D). Let's decode the most popular segment first. At the most basic level, Swiggy earns from the restaurant, the consumer and the wider platform. Its food delivery revenue comprises pre-agreed commissions from restaurant partners, advertising revenue from restaurants, platform fees charged to users, and subscription revenue when it comes to food delivery. There is also a revenue that comes from offering business enablement solutions to the restaurant partners. Furthermore, Swiggy does not recognise user delivery charges passed on to delivery partners as part of its revenue. These charges are included in its separately defined gross revenue, net of applicable discounts. However, it takes "service charge" as revenue collected from users/delivery partners for use of technology platforms, which is also not disclosed. So, on a ₹500 food order, the customer's payment is split across the food value going to the restaurant, delivery-related amounts going to the delivery partner, discounts and fees, while Swiggy's recognised revenue comes from the monetisation streams it retains. Operationally, Swiggy's food delivery GOV grew 17.4% YoY to ₹9,490 Cr and monthly transacting users rose 17.8% YoY to 19.2 Mn in Q1 FY27, ultimately resulting in operating revenue of ₹2,208 Cr. The next question is how much of that monetisation survives after serving the orders. Swiggy answers this via contribution margin. Swiggy calculates food delivery contribution margin (CM) after deducting delivery and other charges, platform-funded discounts and other variable costs from adjusted revenue. In Q1 FY27, this margin stood at 7.6% of GOV. On the other hand, adjusted EBITDA is further calculated after deducting the operating cost, which stood at a 3.1% margin on GOV for the June quarter. The quarter, however, saw a sequential dip in food delivery's CM and adjusted EBITDA margin. This is where Swiggy's cost to achieve EBITDA profitability for food delivery is hidden. The management said that the sequential dip in food delivery margins was partly due to higher investment in delivery-partner availability and the annual wage hike. Meanwhile, the blame was also given to seasonality. At the same time, the company said improved take rates and operating leverage helped drive the 70-basis-point YoY improvement in adjusted EBITDA margin. This creates an interesting balancing act for Swiggy. More delivery partners available at the right time can improve the customer experience and support order growth. But keeping that capacity available also adds to costs. The business therefore has to grow order density fast enough for the additional orders to absorb those fulfilment costs. Interestingly, Swiggy's average transacting restaurant partners also declined QoQ to 2.6 Lakh from 2.8 Lakh earlier. Food delivery, however, is not Swiggy's largest revenue-generating segment. Its supply chain & distribution business reported ₹3,195 Cr in revenue in Q1 FY27, making it the biggest contributor to the company's revenue from operations for the quarter. SC&D works very differently from food delivery. It is an inventory-led B2B business through which Swiggy purchases products and distributes them to merchant partners. This makes the business much more revenue-heavy, but also brings a corresponding cost of purchasing the products that it distributes. However, revenue alone does not tell the full story of Swiggy's business mix — which we will see ahead. While these established businesses form the foundation of Swiggy's P&L, the company's biggest consumer growth bet is operating on a very different set of economics: Instamart. Instamart: The Growth Engine That Is Still Burning Instamart burning cash is hardly new for Swiggy. What has changed is the trajectory of that burn. In Q1 FY27, the quick commerce business reported GOV of ₹7,907 Cr, up 40% YoY and operating revenue of ₹1,232 Cr. Its adjusted EBITDA loss stood at ₹778 Cr (adjusted EBITDA margin at 9.8% of the GOV), declining by ₹80 Cr sequentially, even as the business continued to expand. The picture changes when we talk about Instamart's contribution margin, which improved to -0.2% of GOV, from -1.8% in the previous quarter. The difference between these two numbers is important to understanding where Instamart stands today. Swiggy said contribution margin had turned positive on a monthly basis in May, although the full-quarter margin remained at -0.2%. This means Instamart has almost reached order-level contribution break-even. Besides this, revenue per order rose to ₹108 from ₹97. More than 45% of its stores were contribution margin positive in Q1 FY27, with five of its seven largest cities also reaching positive contribution margins. Still, we cannot say that Instamart is closer to EBITDA profitability based on the CM improvement alone. The gap in CM and adjusted EBITDA profitability reflects the broader cost base of running and scaling the network. Instamart now operates 1,171 active dark stores with 1,089 orders per store per day in Q1 FY27. Yet Swiggy says the overall network is operating at only around 40% utilisation, with significant headroom remaining. At the same time, management expects to add around 75 stores in Q2 because of volume growth in high-growth neighbourhoods. The company is betting on transacting user base increase as well as frequency increase for Instamart's growth, Swiggy's chief financial officer Rahul Bothra said during Q1 earnings' call. And that growth will not only depend on how many people use Instamart, but also on what they buy, and how large their baskets become. Swiggy's Experimental Sandbox: Where Are The Bets Beyond Food Delivery, Instamart and its other established businesses, Swiggy has a separate platform innovations segment that acts as a sandbox for testing new consumer propositions and business models. The company describes it as a set of incubators aimed at creating more frequent and meaningful touchpoints with users. "Platform innovation by its nature is something that we are not committing ourselves fully to. As we have said, once the product hits both product market fit (PMF) as well as what we call business market fit (BMF), that is when it will get its growth capital, and it will have its own economics from there on," Bothra further said during the earnings' call. The portfolio under this head has changed quickly, with some experiments being launched, tested and discontinued. Toing, for instance, was launched as a separate offering targeting price-conscious consumers such as students and early-jobbers, using a different marketplace model for low-AOV meals. In the latest disclosures, Swiggy's CEO Sriharsha Majety said that Toing is different from conventional food delivery across delivery fees, proposition, cuisine, last mile, economics and the value proposition for consumers. The commission model around this product is also different as restaurants' fee is supposed to be low so that they can offer food at a lower price. Besides, Crew is another offering that Swiggy currently classifies under its platform innovations segment. Initially, the product allowed users to find, shop and get delivered anything "from golf course to caddy bookings to reliable and clean cabs, sourcing exclusive hotel rates to even a Hawaiian shirt". Earlier this month, the product pivoted to a "dedicated personal travel concierge offering". Apart from these, Swiggy also runs its sports subsidiary called Swiggy Sports and extensions of the food delivery services including Bolt, 99 Store, Late Night Eats, Food On Train, Eatright, and DeskEats. The portfolio also comes with the possibility of exits. Snacc, Swiggy's standalone food-delivery experiment, was shut in the previous quarter, and Bothra said some operating costs related to the closure were recognised in Q1 FY27. For now, this means the segment remains an investment pool for Swiggy, with the company absorbing the cost of testing whether these propositions can scale. Platform innovations reported ₹51 Cr in operating revenue against a segment loss of around ₹131 Cr in Q1 FY27. Swiggy does not disclose the individual revenue or cost contribution of Toing, Crew or its other experiments, making it difficult to attribute the segment's loss to any one product. At the same time, Bothra added that a larger portion of the investment in platform innovations during the quarter went towards Toing, particularly marketing-led customer acquisition. This is where Swiggy's Food Delivery profitability becomes important to the broader business model. The company has a mature business generating operating profit, while platform innovations continue to absorb investment as Swiggy tests new propositions. The strategy, therefore, is not simply to maximise revenue from every experiment today, but to use the existing platform and its economics to find businesses that can eventually stand on their own. The Price Of Swiggy's Scale Swiggy's expanding portfolio also comes with a sizable cost base. In Q1 FY27, the company reported ₹7,813 Cr in total expenses, against ₹6,812 Cr in revenue from operations. The biggest expense was purchases of stock-in-trade at ₹2,978 Cr. This is largely linked to Swiggy's supply chain & distribution business, where the company purchases products that are subsequently sold to its merchant partners. The SC&D segment generated ₹3,195 Cr in revenue in Q1 FY27, making it one of the largest businesses on Swiggy's books by revenue, even though the segment remained around break-even at the operating level. In comparison, food delivery generated a lower revenue pool than SC&D, but contributed ₹299 Cr in segment profit, while t
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