Swiggy reported a 36% year-on-year revenue jump to ₹7,571 crore in Q2 FY27, with average monthly transacting users growing 21% to 27.8 million. That sounds impressive until you look across the street. Eternal Limited—the company behind Zomato—posted a 78% revenue surge to ₹24,138 crore and a 92% profit increase to ₹125 crore. Investor Presentation +1
The headline difference isn't just about execution speed. It's about accounting models. Zomato's Blinkit shifted to an inventory-ownership model, which means the full value of goods sold counts as revenue. Strip that out, and Eternal's like-for-like revenue growth was 58%. Still nearly double Swiggy's pace, but the gap narrows. Investor Presentation +1
Swiggy's revenue growth breaks down into two distinct stories. Food delivery, the mature cash cow, grew gross order value (GOV) 17.7% to ₹10,054 crore and posted a record adjusted EBITDA of ₹341 crore. That's a 3.4% margin—healthy, but not spectacular. Investor Presentation
Quick commerce through Instamart is the rocket ship. GOV jumped 31.4% to ₹9,230 crore, and net order value (NOV) rose 34.8% to ₹6,594 crore. But this growth comes at a steep price: Instamart lost ₹895 crore in adjusted EBITDA, with a negative margin of 9.7% of GOV. Investor Presentation +1
The math is straightforward. Instamart's losses are larger than Swiggy's consolidated adjusted EBITDA loss of ₹760 crore. Without food delivery's profits, the picture would look much worse. Investor Presentation
Swiggy's total expenses climbed nearly 30% year-on-year to ₹8,703 crore, outpacing revenue growth and widening the sequential loss from ₹791 crore to ₹922 crore. The biggest culprit? Cost of goods, which surged 47% to ₹3,443 crore. Delivery costs rose 33%, and advertising spend increased 25%. Investor Presentation +1
These aren't random increases. They're strategic bets. Swiggy added 69 dark stores in the quarter, taking Instamart's network to 1,240 stores across 133 cities. That's the same number of stores added in the previous three quarters combined. More stores mean more fixed costs before they reach optimal utilization. Investor Presentation
Employee costs actually fell 2% year-on-year, so headcount isn't driving the escalation. The money is flowing into infrastructure, marketing, and the last-mile logistics needed to compete in quick commerce's brutal battleground. Investor Presentation
The contrast in profitability is stark. Zomato's Blinkit generated ₹184 crore in adjusted EBITDA profit—a 0.9% margin on NOV—while Instamart bled ₹895 crore. Blinkit has been profitable for six consecutive quarters, with margins improving from -1.3% to 0.9%. Investor Presentation +3
Scale explains much of the difference. Blinkit's NOV of ₹20,940 crore is more than three times Instamart's ₹6,594 crore. Blinkit operates 2,751 stores against Instamart's 1,240, and its store productivity is significantly higher—₹9.02 lakh NOV per store per day versus roughly ₹5.8 lakh for Instamart. Investor Presentation +3
The inventory model gives Blinkit another edge. By owning stock, Zomato controls assortment and pricing, achieving stable gross margins of 27.5% on NOV. Swiggy is still primarily a marketplace, though shareholders have approved raising the foreign ownership cap to 49.5% to allow Instamart to hold inventory starting mid-Q3 FY27. Management expects this to add about 80 basis points to contribution margin over 2-3 quarters. Investor Presentation +2
Swiggy's management is explicit about the trade-off. The company deliberately removed 4 million unprofitable users and orders over three quarters to reach break-even, then chose to reinvest in customer experience. The target contribution margin is zero to -100 basis points—Q2's -1.0% sits at the edge of that band. Investor Presentation +2
This isn't reckless spending. Swiggy's food delivery business is funding the quick commerce expansion. The core food delivery unit generated ₹341 crore in EBITDA, and the out-of-home (Dineout) segment has been profitable for seven straight quarters. The company also reiterated a 5% steady-state EBITDA margin target for food delivery, up from the current 3.4%. Investor Presentation +1
But the clock is ticking. Zomato is guiding to 60% NOV growth in quick commerce over the next three years. At Instamart's current 31-35% growth rate, market share will continue slipping unless Swiggy accelerates. Investor Presentation
The relative performance tells a story about shifting market dynamics. In food delivery, Swiggy's 17.7% GOV growth trails Zomato's 21.5% NOV growth, suggesting a modest share loss of roughly 0.8 percentage points based on combined order values. Investor Presentation +1
In quick commerce, the gap is wider. Instamart's share of the combined Instamart-Blinkit NOV fell from approximately 29.5% to 24.0%—a 5.5 percentage point drop in a single quarter. Blinkit is adding users and stores much faster, with monthly transacting customers growing 78% year-on-year to 37 million. Investor Presentation +2
Swiggy isn't without counter-moves. The Toing affordability app, now live in 50+ cities, is attracting new or dormant users—two-thirds of Toing's new users fall into these categories. Management believes this could lift the overall food delivery market growth rate to 25-30%, up from the current 18-20%. Investor Presentation
The next few quarters will be critical. Swiggy's inventory model transition starts mid-Q3 FY27 and will take 2-3 quarters to fully roll out. If management's 80 basis point margin uplift materializes, it could narrow the gap with Blinkit. But 80 bps is small against a -1.0% contribution margin and a roughly 4% break-even requirement. Investor Presentation +1
Store maturity is another lever. In Q1 FY27, over 45% of Instamart stores were contribution-margin positive, up from 30% the previous quarter. As new stores mature and order density increases, fixed costs should spread more efficiently. Investor Presentation
The wildcard is funding. Swiggy's cash balance wasn't disclosed in the retrieved data, but an analyst earlier cited annualized free cash flow of approximately -$400 million. Zomato ended Q2 with ₹16,475 crore in cash, though this fell ₹1,813 crore during the quarter due to working capital and capex. Transcript +1
Swiggy's Q2 results paint a picture of a company in transition. The core food delivery business is profitable and growing steadily. Quick commerce is scaling rapidly but burning cash at a rate that keeps the overall company in the red. Zomato, by contrast, has reached scale in quick commerce and is leveraging an inventory model to generate profits.
The competitive positioning hinges on whether Swiggy can narrow its losses while maintaining revenue growth. If Instamart's unit economics improve as management expects, Swiggy could close the profitability gap. If not, Zomato's lead in quick commerce could become insurmountable.
For now, Swiggy is betting that today's investments will pay off in tomorrow's market share. Zomato is already collecting on that bet. The next few quarters will show whose strategy was right.
