Swiggy expects positive adjusted EBITDA by Q3FY26: Sriharsha Majety

At the consolidated group level, food and grocery delivery firm Swiggy expects to achieve positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) by Q3FY26 (Oct-Dec 2025), said Sriharsha Majety, MD and Group CEO, Swiggy and Rohit Kapoor, CEO of Swiggy’s Food Marketplace.

 

In an interview with Peerzada Abrar and Aryaman Gupta, Majety said that he is expecting to see a new wave of opportunities and selection opening for the quick commerce business. Edited excerpts:

 

What has been more challenging for you, the drill of filing the quarterly results or the backpacking trip on a bicycle to Europe many years ago? 

 

I don’t have a good memory of how challenging that trip was. But here the build up towards the IPO was a new experience for me completely. The teams have (addressed) the challenges and done well for me. All I had to do was narrate the story to the investors whether institutional or retail. As you can imagine, preparing the company to become (IPO) ready is more challenging than the process.

 

Can you share insights about the key drivers behind Swiggy’s financial performance? How do you feel about the overall growth trajectory for the company?

 

Our overall gross order value (B2C GOV) grew by 30 per cent year-on-year (Y-o-Y).  Our consolidated adjusted EBITDA loss has gone down by 30 per cent Y-o-Y. Our food delivery business witnessed a near doubling of its profitability, with adjusted EBITDA clocking ~112 crore, at a 1.6 per cent margin. There has been unprecedented focus on the growth and innovation agenda. In the last couple of years, we have done some really solid work to improve the fundamentals of the business. We’ve grown the contribution margin sharply and also have improved operating leverage. This has given a good handle on the overall drivers of the business. It has enabled us to now start focusing on overall growth, innovation and what we can do on affordability in a big way. I am very happy about the overall trajectory. We expect our food delivery business to deliver sustainable adjusted EBITDA margins of about 5 per cent in the medium term. The ‘going out’ business grew by 11 per cent in the last quarter and we are getting closer to break even. Swiggy Instamart, the company’s quick commerce platform, witnessed a significantly improved performance where its GOV growth accelerated to 24 per cent QoQ. 

 

How do you view food delivery and quick commerce services evolving and having an impact on revenues?

 

Looking into the future, a lot of the transformation plans that have been there are starting to show up. Our delivery speeds are at their fastest in multiple cities. Swiggy Instamart plans to double its dark store count by March 25 (vs. 523 on March 24). As a result, the active dark store area will grow to over 2.5 times Y-o-Y to reach 4 million square feet by March 25. It will also allow us to finish our transformation. We have operated as a grocery first business for the first few years of our journey. But now we would see more assortment which opens a new wave of selection for quick commerce. We are also starting to crank up the innovation funnel on quick commerce. You may have seen the recent launch of the pharmacy category as a pilot on Instamart. A lot of things are coming together. Food is a more mature category for us. In the quick commerce category there is going to be a lot of push and pull. There are many players vying for the opportunity. The key for us is to modulate investments to stay competitive in the short term, while continuously building the foundation and have differentiation and new ways of engaging with the consumers. Regarding profitability, at the consolidated group level, we expect to achieve positive Adjusted EBITDA by Q3FY26 (Oct-Dec 2025). We continue to expand into more cities.  Instamart today is present in 54 cities and we'll continue to add cities.

 

Swiggy is expected to turn adjusted EBITDA positive by Q3FY26. Do you feel pressure to turn profitable quickly, given Zomato is in the green?

 

Majety: The guidance we operate with is based on what, we believe, are the timelines for each of our businesses to come together. With each business, we consider the right long-term view for them and how to pace ourselves. It just so happens that the three of them happen to come together in December 2025. There is obviously always pressure. We live in a very competitive landscape, and we will count on our ability to perform every day.

 

Kapoor: We don’t operate with any pressures from the outside world. That is not the mindset we hold as a management team. We are creating great businesses, and there is a huge responsibility to all our stakeholders, including investors, and customers…If the right move were (to achieve profitability) one quarter early, or late, we would have been able to achieve that quite comfortably, without any external pressure.

 

Quick commerce versus food delivery, which of them presents a bigger opportunity in the long term?

 

Majety: The two businesses have very different underlying growth trajectories. Quick commerce is a large market, and it is still early days. In terms of food delivery, we are also at the tip of the iceberg. Compared to a market like China, our grocery industries might be comparable in size, but they have almost 30-times more restaurants than us. Food delivery took off in India before the restaurant industry did. The exciting part about food delivery and going out is that we are building on rails that will grow at a very strong pace over the next one or two decades.

 

Kapoor: The overall grocery market is ten times larger than the food market. That is one way to look at it. But the food market itself is very underpenetrated. For instance, in the US, the food delivery market overtook grocery in 2015…While quick commerce is a very large category today, food delivery, globally, has become larger (in some geographies). So, we are well positioned in both segments, and we see massive headroom for growth which is decadal in nature rather than quarterly.

 

Are you well placed to fend off competition?

 

Majety: After the IPO, our cash balance is close to ~8,900 crores. Two of our businesses will be profitable as we enter the next financial year. Our food delivery business continues to generate money. By the September quarter of FY26, we will be in the last quarter of investment for Instamart from an EBITDA standpoint. With this tapering happening over the next seven quarters, coupled with the incremental accruals that will come from food delivery profits, we are very well placed with the cash balance that we have.

 

Kapoor: When it comes to new markets, while balance sheet strength is important, cash or capital by itself has hardly been the winner. We have seen many companies raise tons of capital and not go anywhere. We like to operate with the paradigm that, while we have the balance sheet strength, we like to build businesses that are very solid in terms of both their growth and (unit) economics profile. When businesses are well run, capital is rarely the issue.

 

Scootsy has contributed 40 per cent of your revenues this quarter. What kind of growth prospects do you see for this segment?

 

Majety: It allows us to be the authorised distributor for multiple brands, connecting them with like retail stores, and then connecting them to our merchant partners who are also selling on the quick commerce platform. At this point, we continue to expand, and we’ll offer the right guidance when we have more clarity.