Shadow No More: Instamart Bags Its Own Spotlight

Swiggy’s quick commerce arm, Instamart, is no longer just a sidekick to its food delivery business—it’s emerging as a standalone force in India’s urban convenience landscape. With a 115 percent year-on-year revenue surge in Q1 FY26 and a growing user base, Instamart is redefining Swiggy’s growth narrative. But the journey is far from smooth, as profitability remains elusive and competition intensifies.

Instamart’s Growth Trajectory

- Instamart’s revenue jumped to ₹806 crore in Q1 FY26, up from ₹374 crore a year ago  
- Gross Order Value (GOV) grew 108 percent year-on-year and 21 percent quarter-on-quarter  
- Average Order Value (AOV) rose 26 percent, driven by assortment expansion and Maxxsaver adoption  
- Contribution margins improved by 100 basis points quarter-on-quarter to -4.6 percent  
- Adjusted EBITDA margin for Instamart improved to -15.8 percent, signaling operational efficiency gains  

Food Delivery vs Quick Commerce

- Swiggy’s food delivery segment grew 18.57 percent year-on-year to ₹1800 crore  
- Instamart’s GOV and user base now exceed two-thirds of the food delivery business  
- While food delivery remains a core revenue driver, its growth is slower compared to Instamart  
- The company’s unified app and standalone Instamart app reflect its dual-brand strategy  

Profitability Challenges and Strategic Investments

- Swiggy’s net loss widened to ₹1197 crore in Q1 FY26, up 96 percent year-on-year  
- Instamart alone posted an EBITDA loss of ₹896 crore, higher than its adjusted revenue  
- Seasonal investments in delivery partner availability and annual appraisals impacted margins  
- Despite losses, Swiggy claims peak burn is behind and expects profitability by year-end  

Consumer Engagement and Platform Expansion

- Average Monthly Transacting Users (MTU) grew 35 percent year-on-year to 21.6 million  
- 35 percent of users engaged with more than one Swiggy service, indicating cross-platform stickiness  
- Instamart added 41 dark stores, expanding active dark store area to 4.3 million sq ft  
- Basket sizes increased, and assortment expanded to over 30,000 SKUs in metro markets  

Competitive Landscape and Brand Identity

- Blinkit continues to outpace Instamart in revenue and AOV, intensifying the quick commerce rivalry  
- Swiggy’s UI-UX overhaul and standalone Instamart app aim to strengthen brand differentiation  
- CEO Sriharsha Majety emphasized Instamart’s evolution into a category-defining business  
- The company is modulating investments to balance scale with profitability  

Final Outlook

Swiggy Instamart is no longer in the shadow—it’s casting one of its own. With aggressive expansion, rising consumer engagement, and a clear strategic pivot, Instamart is poised to become a cornerstone of Swiggy’s future. Yet, the path to profitability remains steep, and competition is fierce. Whether Instamart can sustain its momentum and deliver on its promise of convenience-led growth will be the defining story of India’s quick commerce race.

Sources: Inc42, Fortune India, The CapTable, Swiggy Shareholder Letter Q1 FY26, YourStory, TechStory

 

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