Swiggy Instamart’s Q4 Adjusted EBITDA Loss Widens 45% To INR 840 Cr

Swiggy Instamart’s loss widened sharply in Q4 FY25 as the company increased marketing spending and dark store expansion amid growing competition in the quick commerce space.

Swiggy Instamart’s adjusted EBITDA loss for the period stood at INR 840 Cr, increasing 45.3% from INR 578 Cr in the preceding December quarter. On a year-on-year (YoY) basis, it grew 173.6% from INR 307 Cr. 

However, the quick commerce vertical’s operating revenue rose 19.5% to INR 689 Cr in Q4 from INR 576.5 Cr in Q3. On a YoY basis, it surged 114.8% from INR 320.7 Cr. 

Swiggy Instamart added 316 dark stores in Q4, expanding its network to 1,021 stores at the end of March (up 45% QoQ). The company claimed that its monthly transacting customers grew 40% QoQ to 9.8 Mn, across existing geographies as well as new cities. 

For the full fiscal year, Instamart generated INR 2,129.6 Cr in revenue, marking a 117.6% increase over FY24. However, it also recorded a net loss of INR 1,886 Cr in FY25, up 59.2% from INR 1,184.6 Cr in the previous year.

The increase in losses for the quick commerce vertical reflects the rising costs for customer acquisition, marketing, and dark store expansion, as Swiggy battles rivals like Zepto and Blinkit. 

In its shareholders’ letter, Swiggy said that the quick commerce industry is going through a phase of “heightened consumer awareness and store rollouts”. Notably, the company added 498 new stores in FY25. 

As the company’s dark stores have an average age of less than 4 months, the company said this resulted in a higher underutilised network cost. Coupled with this, the platform’s customer incentives (including delivery fee discounts) “have been at an elevated level, led by competitive intensity and launches in new geographies,”  

Swiggy instamart’s contribution margin also has declined to -5.6% in Q4 FY25 from -1.9% in the second quarter. This, according to Swiggy, was mainly due to the network underutilisation of about 170 bps (1.7%). Furthermore, the customer incentives of about 2.5% also added to the burn. 

During the period, the company also increased its investments for customer acquisition and brand marketing. As the company’s minimum transacting users (MTUs) grew about 60%, according to Swiggy, all these factors impacted the adjusted EBITDA.  

Swiggy expects Instamart to improve the contribution margin trajectory in the coming quarters on the back of its network economics improving and better average order values (AOVs). 

Giving an example, the company said a user cohort acquired in Q4 FY23 is spending about 1.5 times in the 9th quarter compared to the time of onboarding.

In the letter, it also hinted on cutting down customer incentives in coming quarters – something which the company believes will help it cut down the losses. 

However, Swiggy still believes that the competitive intensity will likely remain high in the near-term. It expects the quick commerce vertical to reach breakeven in the next 3-5 quarters.

Megapods Driving Up Order Values 

In the coming years, it seems that Swiggy Instamart’s major focus will be on establishing large darkstores, which it calls ‘megapods’. 

In the last one year, the company opened 44 megapods, which now account for 10% of Instamart’s total darkstore area .

The company said that it has seen good results with megapods, with AOVs “substantially” higher than the platform average. 

“As a result, our FY25 AOV has grown by 11.8% YoY. We will continue to look at opportunities to increase the mix of megapods based on demand patterns and real estate availability, so that a disproportionately better assortment can be made available to our consumers within 15-30 mins, without having to invest in last-mile infrastructure to the same extent,” the company said. 

In its post-earnings call, the company said that megapods have the highest profitability among all the darkstores. 

According to the company, megapods have a design capacity to house 50K+ SKUs, which it is using steadily for scaling up both SKUs (and hence AOVs) and orders per day, without needing to increase physical footprint in tandem.

Overall, Swiggy posted an operating revenue of INR 4,410 Cr in Q4 FY25, up 45% from INR 3,045.6 Cr in the previous year. Its net loss however, increased 95% to INR 1,081.2 Cr in the quarter under review from INR 554.7 Cr in the year ago period.