Swiggy Limited Q3 FY26 Earnings Call Summary

Summary

Swiggy Limited - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026

Event Participants

Executives 5 Abhishek Agarwal, Amitesh Jha, Rahul Bothra, Rohit Kapoor, Sriharsha Majety

Analysts 10 Abhisek Banerjee, Aditya Soman, Garima Mishra, Gaurav Malhotra, Gaurav Ratera, Jignanshu Gor, Kunal Vora, Manish Poddar, Nikhil Choudhary, Sachin Salgaonkar

Financials & KPIs

Geographic & Segment Commentary

• Food Marketplace: Growth of 20.5% in GOV outperformed general guidance of 18-20%, supported by a 30 bps expansion in contribution margin. Efficiency gains were driven by network productivity and intelligent batching rather than reduced delivery partner payouts. Strategic focus remains on increasing Monthly Transacting Users (MTUs) and maintaining steady-state contribution margins of 4.5-5.0%.
• Instamart (Quick Commerce): Revenue growth slowed relative to GMV due to the “no fee” delivery construct for orders above ₹299. Non-grocery selection now accounts for 30% of business, particularly peaking during the festive season. 25% of darkstores and 30-35% of “polygons” are currently contribution margin positive.
• Logistics & Warehousing: Warehousing capacity more than doubled over the last four quarters to support Tier 2 and Tier 3 expansion. Increased capex is primarily directed toward middle-mile infrastructure and darkstore densification to improve replenishment speeds.

Company-Specific & Strategic Commentary

• Profitability over “Vanity Metrics”: Management critiqued the industry-wide focus on “irrational” order growth (e.g., ₹99 minimum order values), preferring to prioritize “good growth” and sticky customers over discount-seeking multi-appers.
• Monetization & Ads: Scale-led monetization and advertising revenue are primary structural drivers for margin expansion, independent of competitive pricing dynamics.
• Maxxsaver Initiative: Habit-building through Maxxsaver remains a core strategy to encourage higher basket sizes and improved retention, despite a slight seasonal dip in relevance during the festive quarter.
• Supply Chain Efficiency: Capex is being utilized to reduce middle-mile costs and improve store replenishment through expanded warehousing, particularly in emerging markets.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

The “No Fee” Experiment

• Question: Why reinvest 90-100 bps of margin into the ₹299 no-fee campaign if it didn’t drive retention? (Sudheer Guntupalli)
• Answer: It was a tactical experiment to understand user behavior amidst high competitive intensity. Since adoption and retention were limited, these funds are being redirected to more structural levers (Rahul Bothra/Amitesh Jha).

Market Share vs. Quality

• Question: Is Swiggy losing market share by not matching competitors’ ₹99 minimum order values? (Aditya Soman)
• Answer: Swiggy focuses on “consumer market share” rather than order volume “vanity metrics.” Real market leadership comes from assortment and availability, not buying temporary growth through unsustainable discounts (Amitesh Jha).

Path to EBITDA Breakeven

• Question: When will the business reach adjusted EBITDA breakeven? (Kunal Vora)
• Answer: While a specific date isn’t set, moving from -₹200 crores to zero contribution margin will immediately unlock significant cash flow. Operating leverage will provide the remaining delta (Rahul Bothra).

Inventory and Working Capital

• Question: Why did capex and working capital increase despite fewer store additions? (Jignanshu Gor)
• Answer: Capex went into doubling warehousing capacity for supply chain efficiency. Working capital increased by ₹130 crores in line with 18% top-line growth, primarily tied to brand-funded discounts and B2B expansion (Rahul Bothra).

Key Takeaway

Swiggy’s Q3 FY26 was defined by a strategic pivot toward “quality growth” over “vanity metrics.” While Food Delivery outperformed with 20.5% GOV growth and expanding margins, Instamart faced headwinds from “irrational” market competition, leading to a temporary plateau in contribution margins at -1.9% due to tactical “no fee” experiments. Management remains committed to Instamart contribution breakeven by Q1 FY27, backed by a ₹2.0 billion cash pile and structural improvements in advertising and non-grocery mix (now 30% of QC). The company is prepared to sacrifice low-value, discount-driven order volumes to protect its path to profitability, banking on superior assortment and warehousing infrastructure to retain high-value cohorts. Swiggy enters the final quarter of FY26 focused on reversing inefficient spends and converting to an IOCC structure as domestic shareholding nears 50%.