Profit on the Horizon? Inside Swiggy Instamart’s High-Speed Turnaround Plan

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Swiggy's rapid commerce business, Instamart, is at the center of a high-risk turnaround as the firm doubles down on fast grocery delivery, driving blowout growth but also expanding losses in Q4 FY25. Red ink aside, Swiggy indicates that Instamart is poised to increasingly unravel its losses as scale, tech, and market coverage investments start paying dividends.

Key Highlights:

Swiggy's Q4 FY25 top line jumped 44.8% year-over-year to ₹4,410 crore, buoyed by strong demand in both food delivery and Instamart, with Instamart's gross order value (GOV) jumping a whopping 101% to ₹4,670 crore.
Quarterly net loss widened to ₹1,081 crore, nearly doubling from ₹555 crore during the same quarter last year, mainly on account of heavy expenses on Instamart's store network, acquiring new customers, and deep-end promotions.
Instamart's adjusted EBITDA margin and contribution margin were negative, as expected, but they capture the short-term cost of aggressive expansion; still, management is hopeful that losses will contract as order volume grows and operational efficiencies improve.
Instamart has over 1,000 dark stores now in 124 cities, average order value increasing and new user groups being reached through such innovations as 10-minute delivery and product curation.
Swiggy's management reiterated its target of becoming operating profitable by 2025-end, with better unit economics, a growing mature customer base, and sustained growth in quick commerce.
Margin movement of Instamart, store expansion, and order numbers are being followed closely by brokerages and analysts as important markers for Swiggy's journey to profitability.

Swiggy's aggressive Instamart move is turning out to be a moment-defining gamble in India's hyper-competitive quick commerce slugfest-losses might be on the rise, but the seeds of a profit-making future are being sown.

Sources: Economic Times, Upstox, YourStory

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