Swiggy Q1: Instamart’s Loss Rises But Margin Improves On Selective Store Additions

Even as its quick commerce arm Instamart continued to weigh on Swiggy’s bottom line in Q1 FY26, the segment showed signs of reduction in its cash burn.

While Instamart saw its loss almost triple to INR 797 Cr during the quarter under review from INR 280 Cr a year ago, the increase was a mere 3.3% on a sequential basis from INR 771 Cr. 

Instamart’s adjusted EBITDA margin also saw marginal improvement QoQ. It stood at -15.8% in Q1 FY26 as against -18% in the preceding quarter, as the company was selective in darkstore additions during the quarter.

“In Q1, we expanded operations to 127 cities (vs 124 in Q4), and added darkstores selectively for alleviating capacity constraints or creating coverage in specific pockets that demonstrated the need,” Swiggy cofounder and group CEO Sriharsha Majety said.

Going ahead, Instamart will “modulate investments” to ensure that the business is driven towards scale-led profitability, he added.

Meanwhile, on the back of store additions and rise in demand, Instamart’s revenue more than doubled to INR 806 Cr in Q1 FY26 from INR 374 Cr a year ago. Sequentially, revenue rose nearly 17% from INR 689 Cr.

Instamart’s contribution margin for the period under review improved to -4.6%, up 97 basis points from -5.6% in the preceding March quarter. 

“Our most mature darkstores in established geographies are operating at ~2% contribution margins on an average today, with the top-cohort of stores reaching ~4%. As the overall network matures, the drag from under-utilisation of new stores will reduce while monetisation will continue to improve leading to higher contribution margins,” the company said in its shareholders’ letter. 

Swiggy added 41 darkstores in Q1, with the total number of stores now at 1,062 across 127 cities. Instamart’s average store size has now increased to over 4,000 sq ft, allowing Swiggy to expand its assortment significantly. 

“We believe that our next phase of network expansion will be driven by need-based opportunities within our existing geographies, rather than broad-based expansion into new, untested areas,” Amitesh Jha, CEO of Instamart, said in a post-earnings call. 

According to Jha, while Instamart’s store number is lesser than that of its competitor Blinkit, the total darkstore area is now comparable, giving the company a same playing field. 

Instamart’s average order value (AOV) for the company jumped 16% QoQ to INR 612 in Q1. 

The company said that customers in metro cities now have access to more than 30,000 SKUs, covering a wide range of categories beyond groceries. This expansion has helped shift the order mix towards higher-value items, with non-grocery products now contributing 18.5% of Instamart’s gross order value, up from 7% a year ago.

The company attributed this growth to the success of its ‘Maxxsaver’ programme, which encourages users to build larger baskets by unlocking incremental discounts. About 28% of Instamart’s monthly transacting users now engage with Maxxsaver.

Meanwhile, on a consolidated basis, Swiggy’s net loss doubled to INR 1,197 Cr in the June quarter from INR 611 Cr in the year-ago quarter. On a sequential basis, the company’s loss grew 11% from INR 1,081 Cr. Operating revenue surged 54% to INR 4,961 Cr in Q1 FY26 from INR 3,222 Cr in the year-ago period.