Swiggy’s shares plunged to fresh lows on October 23, 2026, despite the company reporting 36% revenue growth and a smaller year-on-year net loss. The reason behind the selloff lies in one business: Instamart.

Investors were expecting stronger progress towards profitability in quick commerce. Instead, Swiggy’s latest quarterly results revealed widening Instamart losses and continued pressure from aggressive competition.

The stock fell approximately 14% during morning trading, with later reports showing losses extending to around 15%, taking the share price close to ₹180 on the BSE.

The sharp decline reportedly wiped out approximately ₹9,000 crore from Swiggy’s market capitalisation during the session.

Swiggy reported consolidated revenue from operations of ₹7,571 crore for the July–September quarter of FY27, compared with ₹5,561 crore in the corresponding quarter last year.

That represents year-on-year growth of approximately 36.1%, demonstrating continued expansion across the company’s operations. Its consolidated net loss narrowed to ₹922 crore from ₹1,092 crore a year earlier, an improvement of approximately 15.6%.

However, the comparison with the immediately preceding quarter presents a different picture. Swiggy had reported a net loss of approximately ₹791 crore in Q1 FY27, meaning losses widened sequentially during the September quarter.

The company’s total expenses increased to ₹8,703 crore from ₹6,711 crore a year earlier, reflecting the substantial cost of supporting growth.

The contrast between rising revenue and persistent losses is at the centre of the market’s concerns. Swiggy’s core food delivery business continued to perform relatively well.

Food delivery gross order value increased 17.7% year-on-year to ₹10,054 crore. The segment’s adjusted EBITDA rose to ₹341 crore, an improvement of approximately ₹101 crore from the year-earlier period.

Management described this as the food delivery business’s strongest profitability performance so far. That improvement suggests Swiggy’s established food delivery operations are becoming more efficient as order volumes and operating leverage improve.

However, the profitability gains from food delivery have not been sufficient to offset the heavy losses in quick commerce. Instamart recorded an adjusted EBITDA loss of approximately ₹895 crore during Q2 FY27, compared with around ₹849 crore a year earlier.

The widening loss came despite continued growth in orders and transaction values. Swiggy reported quick-commerce net order value growth of 31.4% year-on-year and 13.4% sequentially, reaching approximately ₹6,954 crore under the company’s reported metric.

Instamart also added 69 dark stores during the quarter, bringing its network to approximately 1,240 locations. These dark stores are small fulfilment facilities positioned close to customers to enable rapid delivery of groceries and other products.

Opening new stores increases capacity and geographic coverage, but also creates additional costs before individual locations reach efficient utilisation.

Expenses related to staffing, inventory handling, delivery operations, technology and customer acquisition can therefore weigh on margins during expansion. This is where Swiggy faces its most important strategic challenge.

The company must grow Instamart quickly enough to compete with Blinkit and other quick-commerce platforms while demonstrating that each additional order can eventually generate sustainable profits.

Competition has made that balance increasingly difficult. Eternal, the parent company of Zomato and Blinkit, has also been expanding its quick-commerce operations.

Investors are closely comparing the two companies on order growth, dark-store productivity, customer retention and profitability.

The comparison is particularly uncomfortable for Swiggy because brokerages have highlighted a widening execution gap between Instamart and its larger competitor. Following the results, several brokerages reduced their Swiggy share-price targets.

HSBC maintained its Hold rating but lowered its target from ₹315 to ₹240, citing concerns about competitive pressure and confidence in long-term profitability guidance.

Jefferies retained its Buy rating while reducing its target from ₹435 to ₹330, identifying Instamart’s losses as a major obstacle to value creation.

Nomura also maintained its Buy recommendation but cut its target to ₹300, expressing concerns about quick-commerce execution despite the stability of the food delivery business.

CLSA reduced its target to ₹262 while retaining an Outperform rating, highlighting the need for more consistent operational improvements.

These differing ratings show that analysts are not uniformly negative about Swiggy’s long-term prospects, even though they have become more cautious about near-term performance.

Management, meanwhile, believes Instamart’s adjusted EBITDA losses may have peaked in Q2 FY27. The company expects approximately 100 basis points of sequential margin improvement in the December quarter.

Swiggy is also preparing to transition Instamart towards an inventory-led operating model, which it expects could improve contribution margins by around 80 basis points once fully implemented.

That transition could improve product availability, assortment control and economics, although it may also introduce inventory-management and working-capital risks.

For investors, the next quarter will therefore be an important test of management’s expectations. If Instamart losses begin declining while order volumes continue expanding, confidence in the company’s path towards profitability could improve.

However, if competition forces continued spending on discounts, delivery infrastructure and store expansion, the financial pressure could persist.

The latest selloff shows that strong revenue growth alone is no longer enough to satisfy the market. Investors increasingly want evidence that Swiggy can translate its growing customer base and delivery network into sustainable cash generation.

The critical indicators to monitor are Instamart’s adjusted EBITDA losses, contribution margins, dark-store utilisation, order growth and the profitability of its established food delivery operations.

Swiggy’s Q2 FY27 results reveal a business that is still growing rapidly, but whose future valuation may depend more on reducing quick-commerce losses than on accelerating revenue alone.