Swiggy weighs Rapido exit amid conflict, loss widens to Rs 1,197 crore in Q1

Time of India

a day ago

BENGALURU: Swiggy is re-evaluating its 12% stake in bike-taxi startup Rapido after the latter announced plans to enter food delivery, a potential conflict with Swiggy's core business.
'When we got in two and a half years back, it was a mobility player doing really well. Unfortunately, it has decided to get into food delivery themselves. That has made us take notice of the conflict and therefore we're planning to go separate ways on this,' CEO Harsha Majety told analysts.
The development comes as Swiggy's loss for the June quarter widened to Rs 1,197 crore from Rs 611 crore a year ago, even as revenue from operations surged 54% to Rs 4,961 crore.
Quick commerce remained the company's biggest growth driver. Instamart's gross order value doubled year-on-year to Rs 5,655 crore, aided by a 26% jump in average order value to Rs 612 from its basket-building feature Maxxsaver. Contribution margins improved by 97 basis points sequentially to -4.6%, though the segment posted a loss of Rs 896 crore.
Amitesh Jha, CEO of Instamart, said the focus would remain on deepening penetration in existing markets rather than adding new cities.
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'Market penetration is so low in the cities out of the top 10 or 20 that we believe the right opportunity is to be focused and not necessarily measured,' he said, adding that there is 'enough headroom for growth in the 127 cities we are already in.' Swiggy added 41 darkstores in the quarter, taking its network to 1,062.
Food delivery continued to grow steadily, with gross order value rising 18.8% to Rs 8,086 crore. Adjusted Ebitda margin in the segment slipped to 2.4% from 2.9% sequentially, which Swiggy attributed to seasonal delivery-partner incentives and annual wage hikes.
The company is also experimenting with new consumer offerings. Bolt, its 10-minute food delivery service, now contributes over 10% of orders, while the 99-Store targets price-sensitive Gen-Z users. Average monthly transacting users on the platform rose 35% year-on-year to 21.6 million, with more than a third using multiple services.
Swiggy ended the quarter with Rs 5,354 crore in cash and reiterated its guidance to break even on quick commerce contribution margins between Q3 FY26 and Q1 FY27.
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