Swiggy’s Instamart is now close to the point where a typical order pays for itself. In the July–September quarter, its contribution margin was -1.0% of gross order value (GOV). Contribution is what remains of revenue after delivery costs, platform-funded discounts, fulfilment and other variable costs. On Logistics Insider’s calculation from Swiggy’s KPI databook, that works out to a loss of roughly ₹7 per order, down from about ₹18 a year earlier.
The business as a whole, however, lost more. Instamart’s adjusted EBITDA loss widened to ₹895 crore, from ₹849 crore a year ago and ₹778 crore in the June quarter, according to Swiggy’s Q2 FY27 shareholders’ letter, released on 22 October.
Where the loss sits
The gap lies above the order line. Year on year, Instamart’s contribution loss roughly halved, from about ₹181 crore to about ₹93 crore. Over the same period, the costs Swiggy reports below contribution rose by about ₹134 crore to roughly ₹802 crore. Swiggy has previously said marketing sits in this layer. It has not broken down the increase.
Growth is absorbing some of that. As a share of GOV, those costs fell to about 8.7% from 9.5%, and Instamart’s adjusted EBITDA margin improved to -9.7% from -12.1% a year earlier.
Sequentially, contribution slipped from -0.2% of GOV. Swiggy says it reached contribution breakeven in May and then chose to spend within its guided band of zero to -100 basis points. That meant 100 bps on habit formation and reactivating dormant users, plus a 40 bps hit from a shift in user and category mix. Operating leverage, mainly higher store utilisation, clawed back 60 bps.
Why 69 stores now
Instamart ended September with 1,240 dark stores across 133 cities, up from 1,171 stores in 131 cities in June. The 69 net additions equal its previous three quarters combined. Swiggy added them, it says, “as higher growth led to more stores reaching maximum capacity utilisation.” The under-utilisation costs of new stores are expensed in contribution during their first one or two quarters, so the expansion weighs on the near-term margin.
The existing network is working harder. Orders per dark store per day rose 9.5% quarter on quarter to 1,192, measured on active store-days. GOV per square foot of store area rose to ₹17,730 from ₹16,056. Total store area reached 5.21 million sq ft, an average of roughly 4,200 sq ft per store.
Demand picked up after two slow quarters. GOV grew 31.4% year on year to ₹9,230 crore. Net order value (NOV, which is GOV less all discounts) rose 34.8% to ₹6,594 crore, and grew 13.4% sequentially against 2.5% in the June quarter. Orders rose 29.3% to 130.3 million, and monthly transacting users rose 23% to 14.8 million. Swiggy credits month-one retention above 60%, targeted pricing such as its ₹9 Store, and assortment led by its private brand No!ce and the Switch range.
The bet: losses have peaked
“We believe the Adjusted EBITDA losses to have peaked out in Q2FY27,” the letter states. Swiggy describes the pricing investments as “discretionary and transient”. For the December quarter, it guides to another round of double-digit sequential NOV growth, contribution within zero to -100 bps, and an adjusted EBITDA margin about 100 bps better. It also warns that competitive intensity is unlikely to ease in the near term, with horizontal e-commerce majors active through the festive quarter.
These are company projections. The December-quarter numbers will test them.
What each store has to deliver
Swiggy’s own breakeven arithmetic sets the bar. It needs about 2.3 times today’s scale, or ₹60,000 crore of annualised NOV against roughly ₹26,400 crore now, and ₹30 of contribution per order. Today it is losing about ₹7 per order. Two-thirds of that improvement is meant to come from higher revenue per order (product mix, own brands and advertising). The remaining third is meant to come from lower cost per order through densification, automation and operating leverage.
That puts throughput at the centre, a shift already visible in dark-store density across Indian cities. Two operational changes stand out. First, from mid-Q3 Instamart begins moving to owning inventory, a transition Swiggy expects to take two to three quarters. Swiggy says it could add about 80 bps to contribution margin and give it more control over assortment, pricing, availability and day-to-day operations. It also expects working capital to normalise at about 15 days. Second, on the last mile, Instamart has co-located battery swapping at last-mile stations, which Swiggy says saves EV delivery partners up to 60 minutes a day.
Both point to the same lever: more orders through each store and each rider, with replenishment that keeps shelves full. For the 69 new stores, the test is how fast they climb to the network’s 1,192 orders a day.
