Food delivery giant Swiggy finds itself at a critical juncture, and it’s almost a make-or-break time for its big bet on quick commerce.

Despite getting a thumbs-up from brokerages for the potential upside in the long run, a surge in losses for Q4 FY2025, primarily fueled by its aggressive expansion of Instamart is a worrying sign.

Undoubtedly, the revenue growth is a positive factor for Swiggy, but the fact is that it has fallen deeper into the red. Over the past year, we have seen the Instamart and quick commerce boom, the launch of new services and verticals, and the much-heralded Swiggy IPO, but profits have eluded the Sriharsha Majety-led company.

The stock market’s reaction has been telling. Despite a brief intra-day rally post-results, Swiggy’s stock recently touched an all-time low of INR 297 in the middle of last week, before recovering slightly to INR 321.15, which is still more than 20% below its listing price of INR 420.

This raises a pressing question: can Swiggy navigate this cash-intensive growth phase and emerge profitable, or is it digging a hole too deep to escape?

The Instamart Hole

Swiggy’s Q4 FY25 results painted a stark picture of its current situation. The company’s consolidated net loss nearly doubled year-on-year, ballooning to a staggering INR 1,081.18 Cr. This was 35% higher than the INR 799 Cr loss in Q3 FY25.

Revenue from operations showed some spark, rising sharply by 44.8% year-on-year to INR 4,410 Cr in Q4 FY25. On an EBITDA level, significant growth investments in quick commerce took a toll, and Instamart itself incurred an operational loss of INR 770.9 Cr in the quarter.

This was driven by an unprecedented expansion, where Swiggy added 316 new dark stores – more than the previous eight quarters put together – and deploying INR 425 Cr in capex in Q4 alone. This aggressive push, coupled with increased customer incentives, led to underutilised network capacity and elevated burn.

Operating revenue for Instamart soared as a result of these investments, more than doubling YoY to INR 689.1 Cr and a similar growth was seen in the gross order value (GOV) and monthly transacting users.

Swiggy CEO Majety acknowledged the “rapid expansion phase” and “high competitive intensity,” but stated that Instamart likely reached its “peak of adjusted EBITDA losses” in late Q4 and things are only going to improve. But that’s not what the competition is saying.

Eternal-owned Blinkit’s adjusted EBITDA loss widened over 381% to INR 178 Cr in the March quarter. While this is not as severe as........

© Inc42