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Informist, Friday, May 8, 2026

 

--Swiggy: Seeing greenshoots of optimism in Toing app 

--CONTEXT: Comments by Swiggy's management in post-earnings analyst call 

--Swiggy: Incurring capex on warehousing operations 

 

By Anand JC and Afra Abubacker

 

MUMBAI/NEW DELHI – With an eye on building a durable quick-commerce business, Swiggy Ltd. Friday said the company is trying to balance between growth in market share and profitability to get closer to the company's aspirations in this highly competitive business. "Fighting for short-term relevance and going after spending in places that will hurt us later will compromise our long-term relevance. So honestly, it is a balanced act," Chief Executive Officer Sriharsha Majety told analysts in a post-earnings conference call.

 

"I don't think there is any commitment to go and lose market share. I think it's important to build a more durable business," Majety said. In a letter to the company's shareholders, Majety called out the highly competitive nature of the multi-player quick commerce market. "The increasing competition has only made it clearer to us that increasing our staying power and doubling down on our differentiation is the only path to winning in the medium term," he said.

 

Majety stressed that Swiggy's quick commerce business Instamart has achieved a certain scale and profitability. "Any growth from here on is going to be good growth because it's going to add to the contribution pool and to the (company's) profitability journey," Majety said. The company is yet to turn a profit. For the March quarter, Swiggy reported a consolidated net loss of INR 8 billion on revenues of INR 63.83 billion.

 

The contribution margin of its quick commerce business for the quarter under review improved to -1.8% of its gross order value. The company has set a target to achieve break-even at the contribution margin level by the end of the June quarter. "Break-even contribution margin increases our staying power...at any point of time, the focus is to create more such kinds of differentiation (in product offerings) and bring opportunities associated with it," the company said.

 

"The growth that we will see, the one thing that will happen after we reach a CM break-even is that any kind of headwind that we had created because we had to reach this CM (contribution margin) positive curve will essentially go away, and that will allow some more aspects of growth which we continue to oversee from the next quarter onwards," the company added.

 

Swiggy said it will not make any investment that dilutes its contribution margin without having any advantage in the business that it is building. "So buying growth, we will essentially not do, which will basically mean that yes, we don't see a CM dilution happening going forward," the company said. Buying growth refers to the strategy of using capital investment through deep discounts and high marketing expenditures to inflate order volumes and capture market share.

 

Swiggy had launched its standalone budget-friendly food delivery app Toing in September. "Now, its early days, but Toing has clearly seen some green shoots of optimism, but it is too early to say that this is a definitive (business) model," Majety said. "Any such model also evolves as we go along. And I know food delivery is seen as a unidimensional characteristic, but if you think of other industries, even e-commerce and quick commerce exist, there's some overlap of customers, but they're legit two separate businesses in their own right," he added.

 

Swiggy incurred capex of INR 1.88 billion during the quarter under review, which was primarily spent on warehouse infrastructure and relocation of its corporate headquarters. "We expect the overall capex investments to meaningfully come down in FY27 with significant head room having been created over the last two years in our dark store and warehousing infrastructure network build-out," the company said. 

 

On Friday, its shares closed 0.4% higher at INR 280.50 on the National Stock Exchange.  End

 

Edited by Avishek Dutta

 

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