Bengaluru – Swiggy, the Indian food and quick-commerce market leader, has once again reported a fantastic performance on the leading line, yet left markets and investors wondering how the company might make a profit after publishing its Q3 FY26 financial results.
Author: Akshita Jain | EQMint | Corporate announcements
The company has recorded a very good growth of 54 per cent year-on-year in revenue to Rs 6,148 crore in the quarter ending December 31, 2025, but the company’s net losses had increased substantially to Rs 1,065 crore, which was nearly 32-33 per cent higher than the previous year.
This contrast of such strong expansion and red ink has caused mixed reactions in the realms of finance – shareholders doubting Swiggy’s finances and market analysts doubting the viability of the company’s expansion-first strategy.
Is it really possible that the revenue growth of Swiggy is much greater than its increasing losses, or does the food delivery giant enter into a profit trap?
Revenue Increase: Riding High on Demand and Expansion
The revenue surge in Q3 FY26 at Swiggy indicates an indicative growth of business in all its business verticals, including food delivery and supply chain services. The total revenue obtained by the company under the operations has increased to Rs 6,148 crore, whereas in the same quarter of the previous fiscal year, it was Rs 3,993 crore, which is a remarkable growth of 54% in the company’s revenue per year.
The main reasons why this grew were:
- Food Delivery Segment: The high demand remained, leading to an increase in its gross order value (GOV) of around rs 8,959 crore – the highest growth rate in three years.
- Supply chain/distribution: Scootsy Logistics has become a significant player with an operating revenue of 48% and a growth of 76% per annum.
- Quick Commerce through Instamart: Shown to have a rocket-like growth with GOV increasing by more than 7 times/year to [?]7,938 crore, which is even more a multi-vertical growth strategy at Swiggy.
The company went even further in terms of geographic penetration and operational base, with 34 additional dark stores in the quarter, which has increased its operation hubs to 1,136 in operation in 131 cities, improving delivery capacity and efficiency.
The number of monthly transacting users increased too, but at a steep rate by almost 37 per cent to approximately 24.3 million, consolidating Swiggy in the market of both the urban and emerging markets.
Losses Widening: A Strategy of Cost of Growth?
Swiggy reports a net loss that increased substantially to Rs 1,065 crore in Q3 FY26 vs Rs 799 crore in Q3 FY25, which has increased by more than 30 per cent year-on-year despite a spectacular increase in revenues.
On further examination, one can find several cost levers that led to the growing deficit:
- Aggressive Expansion Investment: Intensive investment in the expansion of the Instamart quick-commerce business in terms of the construction of dark stores, delivery systems, and fulfilment systems strained margins.
- Increasing Operating Costs: Operating costs, procurement and supply costs, increased at a sharp rate, indicative of the economy-wide macro cost inflation and logistic difficulties.
- Increased Marketing and Advertising Expenses: Significant customer acquisitions and advertising increased the expense base of the company.
On a sequential basis, nonetheless, the net losses were a little smaller than in the prior quarter, and this is a positive sign that the cash burn rate is starting to be tamed.
The adjusted EBITDA margin of Swiggy improved, as well, but it is still in the negative region, shifting towards lower losses than in the previous quarters.
What Management Says: Striking a Balance between Growth and Path to Profitability
The leadership of Swiggy believes that investments in the present are aimed at creating a base of profitability and leadership in the market in the long term. The good cash position exceeding Rs 13,500 crore of the company, inclusive of the proceeds of a qualified institutional placement and strategic selling of assets, acts as a buffer to help the company to continue its expansion without tight financial circumstances.
The story of the management underlines:
- Gaining market share in food and grocery delivery, where there is intense competition and scale is vital.
- Improving user experience with the help of technology, the expanded range of services provided, and accelerated delivery fulfilments.
- Better margins as the business expands the operational leverage.
Market Reaction & Investor Sentiment
Shareholders reacted in a more reserved way to the announcement of earnings:
- The share price of Swiggy also plummeted after the results, with a decline of about 7-8% in the market, indicating that the market is concerned about the increasing losses despite the good strength in revenue growth.
- Analysts also observed that even though the topline numbers are a sign of good consumer traction, the bottom line is still crippled by high costs, especially in quick commerce.
The opposite nature of the growing revenue and increasing losses raises a key issue: will Swiggy be able to evolve beyond a growth-oriented model and provide sustainable profitability?
What Lies Ahead
The next few quarters will be observed keenly, given that Swiggy is set to grow its coverage areas and further engage in vertical integration; positive signs of better operating leverage, cost efficiencies and margin growth are likely to be observed. To investors and market observers, the indicators of importance will be:
- Net losses will go down in subsequent quarters.
- Operating cost stabilization.
- Further expansion of high-margin segments.
The results of the Q3 FY26 of Swiggy indicate the opportunity and risk of hyper-growth in the competitive foodtech market of India – a complicated balancing act between growth speed and profitability.
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Resource Link : ET
