Swiggy falls 5% as Instamart losses widen

Limited (SWIGGY) fell 5.48% after its Q2 FY27 results showed widening losses at its quick commerce arm, Instamart, even though the consolidated net loss narrowed 15.6% year-on-year to ₹922 crore. The results were announced on Thursday, October 22, and the stock is in focus on October 23. Revenue from operations jumped 36.1% to ₹7,571 crore. Food delivery gross order value grew 17.7% to ₹10,054 crore. Instamart's net order value rose 31.4% year-on-year to ₹6,954 crore. Instamart added 69 dark stores in the quarter, as many as in the previous three quarters combined, taking its network to 1,240 stores. Food delivery is now a solid profit engine. Its adjusted EBITDA hit a record ₹341 crore, up from ₹240 crore a year ago, with a 3.4% margin. That business is funding the expansion of quick commerce. The problem is Instamart. Its contribution margin fell 82 basis points sequentially to -1% of GOV, and its losses widened as the company opened stores at a much faster pace. The consolidated loss also widened from ₹791 crore in the June quarter, so the year-on-year improvement hides a weaker sequential trend. The aggressive dark store expansion signals that competition in quick commerce is not easing, and profitability is being pushed further out. Investors should watch Instamart's contribution margin, the pace of dark store additions, food delivery growth, and management's comments on its revised Instamart strategy. The key question is whether food delivery profits can keep covering quick commerce losses until Instamart reaches breakeven. Disclosure: I do not hold any position in Swiggy Limited. This post is for informational purposes only and is not investment advice.