Over two months after attaining the IOCC (Indian-Owned and Controlled Company) tag, Swiggy announced that it will shortly commence transitioning its quick commerce business, Instamart, to an inventory-led model.
In its Q2 shareholders letter, the company announced that it will pivot Instamart to the inventory model by mid-Q3 FY27. The transition is expected to take 2-3 quarters to complete. Swiggy expects the transition to improve Instamart’s working capital cycle by 8-10 days.
“As we have mentioned in our previous communications, this has the potential to add 80 bps to Instamart’s contribution margin when fully rolled-out while giving us greater flexibility and control over assortment, pricing, availability and day-to-day operations,” the company said.
The inventory model will give Instamart greater control over product assortment, pricing, availability and day-to-day operations in comparison to its current model where Instamart operates as a marketplace hosting seller entities.
Eternal’s quick commerce arm Blinkit was the first to complete the inventory-led model pivot. The company has seen a significant improvement in its bottom line performance since then. Blinkit has emerged as the largest revenue contributor for Eternal, contributing ₹19,152 Cr to the company’s total ₹24,138 Cr operating revenue for Q2 FY27.
Swiggy has been bidding to undertake a similar transition for some time now. Its initial May 2026 special resolution to become an IOCC failed after receiving 72.36% of shareholder votes in favor, narrowly missing the required 75% threshold
It managed to get shareholder approval to enable the transition earlier in August. Today, the company said its domestic ownership has increased to over 58%.
Instamart Margins Under Pressure
Swiggy’s quick commerce margins further weakened in the September quarter (Q2 FY27).
The quick commerce business reported a contribution margin of -1% of gross order value (GOV), compared with -0.2% in Q1 FY27 on the back of higher spending on pricing and customer retention.
Instamart’s adjusted EBITDA loss widened to ₹895 Cr in Q2 FY27 from ₹778 Cr in the preceding quarter. Its net order value rose 34.8% year-on-year to ₹6,594 Cr, while Swiggy added 69 net dark stores during the quarter, taking the network to 1,240 stores across 133 cities.
“Contribution margin was -1.0% of GOV within the range guided earlier, as we added 69 net stores, taking the network to 1,240 stores across 133 cities, and invested in differentiated assortment, availability and service quality,” the management added.
While Instamart NOV grew 13.4% sequentially to reach ₹6,594 Cr and orders were up 29.3% YoY to 130 Mn, the adjusted EBITDA loss rose to ₹895 Cr in the quarter.
At the consolidated level, Swiggy’s revenue from operations increased 36.1% YoY to ₹7,571 Cr in Q2 FY27. Its net loss narrowed 15.6% year-on-year to ₹922 Cr, but widened from ₹791 Cr in Q1 FY27.
Shares of Swiggy ended today’s trading session 5.01% lower at ₹211.30 apiece on the BSE.
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