Ladies and gentlemen, good day and welcome to Swiggy Limited Q1FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Agarwal, Head of Investor Relations from Swiggy Limited. Thank you, and over to you, sir. Thank you, Operator. Hello everyone, and welcome to the Q1 FY2026 Earnings Call for Swiggy. Our financial results and shareholders' letters have been published on the exchanges, and the information pack has been placed in the Investor Relations section of our website, www.swiggy.com. We would like to inform you that the management may make certain comments on this call that one could deem forward-looking statements, specifically the financial guidance and proforma information that we will provide on the call. Our management estimates are based on certain assumptions and have not been subjected to any audit, review, or examination procedures. Swiggy Limited does not guarantee these statements and is not obliged to update them at any time. Joining me on the call today are Sriharsha Majety, MD and Group CEO, Rahul Bothra, our CFO, Rohit Kapoor, CEO of Food Marketplace, and Amitesh Jha, CEO of Instamart. Before we start the proceedings, we think it is useful to share our top-of-mind messages from our quick commerce business, for which I will invite Amitesh. Over to you. Thanks, Abhishek. What I'll do is I'll give a very high-level, you know, top-of-mind for this particular quarter. Our GOV growth accelerated to 100% YoY. This was primarily led by our dark store expansion, both existing and in essentially the new areas that we went into. As we have also spoken in the past, the average order value is a very important determinant of the profitability of the business. I'm happy to report that our focused efforts have led to a substantial change in the slope of our driving AOV, with a movement of 16% quarter on quarter and 26% YoY, which is ahead of our guidance that we gave. This growth in AOV with focused efforts led to a consolidation of carts while leading to a higher GOV per customer per month by 8%. This combined with letting go of some of the low AOV orders led to a moderation in our order growth quarter on quarter. In the last call, we shared that our contribution losses had peaked. In line with the same, our contribution margin has improved by 100 bps quarter on quarter, despite there being significant headwinds of the full quarter impact of the network expansion that we did, which was slightly back-ended in the March quarter, where we had added 316 stores. We are continuing to see improvements in our contribution margin. As our customers and stores mature, we are confident of delivering higher improvement in contribution margin in the next quarter as well. This category is still in an early phase of customer penetration and has a significant runway of growth. We are seeing continued heightened levels of marketing investments by all the players. We will maintain the flexibility to invest for growth for the subsequent quarters as well. That's it from, as you might said, over to you, Abhishek. Great. Thank you, Amitesh. With this brief preamble, let us start the Q&A. Operator, you can please go ahead. Thank you very much, sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may press * and 1 on the touchtone phone. If you wish to withdraw yourself from the question queue, you may press * and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Garima Mishra from Kotak Securities. Please go ahead. Yeah, hi. Thank you so much for the opportunity. My questions are on the Instamart business. The first one, Instamart has shown a significant AOV improvement, as Amitesh you just highlighted, but ideally this should have also driven a significant contribution margin improvement QoQ, right? You have mentioned that higher delivery costs were a drag, as was the network expansion. However, has Max Saver also contributed to higher costs in the form of higher basket level discount? Yes, see, Max. The Max Saver is a very specific use case in which we are encouraging consumers to, you know, purchase a higher basket size. Yes. In terms of contribution or in terms of the take rate for those specific orders, it is lower than what you would have had for a smaller basket. The way we see it, Max Saver is a habit. What we have seen is that there are a lot of customers who have been habituated. There is a 28% MTO penetration for Max Saver, and we see those customers coming back again for Max Saver orders. That habit formation is something that we have done. In the subsequent quarters, we will make sure that there is significant investment from a lot of ecosystem players to make sure that it becomes more sustainable. In the initial phases, we see that as a slight headwind for our overall ready take rate, but in the long run, it will have a substantial impact for our contribution margin in the future. Is there any quantification we can provide for how much Max Saver may have impacted your contribution this quarter? Yeah, Karima, Rahul, we will not provide specific, you know, because it is competitively sensitive. However, as Amitesh had mentioned, see, it was important for us to make a pretty hockey stick jump in our average order value, right? As you know, this is a key KPI for ultimately the overall network profitability to get established. What we have meaningfully done in just one quarter is to change this trajectory in a significant manner, right? 26% year-on-year growth on our average order value means that a lot of customers are now starting to move not only their grocery purchases, but also their household wallet to this, you know, proposition. We remain very confident of our ability to monetize on this channel. While, you know, there could be some bit of investment that the platform needs to do to create this habit, over time, we will be able to continuously reduce this and get to the stated, you know, objectives. As we had mentioned also, the contribution margin, you know, we remain steadfast, you know, our ability to improve that remains very high. Even in the quarter gone by, we've added 240 basis points in our overall monetization efforts, including the reduction of some of the subsidies. At the same time, there were a couple of headwinds around the full quarter cost. Our guidance remains that we expect to get to contribution margin neutrality between December and June quarter of calendar year 2026. Towards that, you know, while we made 100 basis points improvement in the previous quarter, we actually expect to make even higher, you know, contribution margin improvement in the current quarter. All of this improvement is not back-ended. Got it. Second question, again on Instamart, how are you thinking about the pace of store additions over the next few quarters? Will it be in, you know, sort of similar to what we've seen this quarter? On fixed costs, which lie below the contribution margin, you have mentioned these costs may not decline, and I understand why they may not, but do we think these costs will increase in line with store additions or maybe at a lower pace? Yeah, we have also mentioned in our shareholder letter that from a pure addition of stores and the network footprint in terms of sq. ft. that we have added, we believe that we have reached a state that allows us to be very comfortable with the kind of service that we are essentially giving to the customer. The growth headroom that we essentially have created, we believe that our next network expansion will be based on the need based on these geographies, and it will not be for necessarily expansion into the wide spaces. \The overall network expansion is such that it will allow us to grow at 100% without addition of a lot of off-store, you know, essentially sq. ft.. That's the reason we don't want to give any kind of guidance for the addition of the stores as well. On fixed cost? Okay, as I said in my earlier note. Do they increase in line with store addition? Yeah. No, the fixed cost is more of a consumer acquisition cost. Ultimately, you know, a lot of that essentially goes into marketing. Marketing is something that we see as a result of what is happening in the market. As I said, we'll continue to be competitive to make sure that we are acquiring customers for the category as well. I think the level of runway of growth that we have should allow us to be more measured in our approach on how do we acquire customers. If it is leading to a higher growth, we don't want to let that go as well. Yes, fixed costs will be an area that we see being at a similar rate for a few quarters. Got it. Thank you so much for taking my questions, and wish you the best. Thank you. The next question is from the line of Sachin from Bank of America. Please go ahead. Hi, thank you for the opportunity. I have three questions. All three questions on Instamart. First question, I wanted to know your general thoughts on competition. One gets a sense in the last three to four months, competitive intensity has sort of gone down. I wanted to understand what you're seeing on the ground and how do you look at that? See, if you're comparing it to the GFM quarter, yes, it has essentially gone down. At an absolute level, the intensity in the market, we see it being at the heightened level. There are new players also entering the market. Some of them are taking baby steps into these markets as well. Overall, we don't see this quarter as any indication of will the competitive intensity go up or down. We believe that heightened level will remain, and it is something that we are also baking into our plans. Got it. Second question, more as a follow-up to this entire competitive view, again, wanted a bit of a color in terms of dark store expansion. Between, let's say, urban metros and tier two cities, how are you thinking in terms of expansion? In the shareholder letter, you mentioned a large part of network expansion was front-loaded and going ahead, you know, you guys are looking at a measured pace. Does that mean that even though competition is present and expanding, you guys will be a bit more calibrated in the approach or that approach would change basis, you know, how competition is? See, we are in 127 cities right now with 4.3 million sq. ft. of store area, which is significant even if you look at, you know, compare it to anybody else in the market. We believe going higher than 127 cities will be more opportunity-based, will be based on how do we see that network of geographies come into play. There is such a significant headroom. 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. The way I will approach is that be more focused in the areas that we are already in. If expansion is required, expand in those areas rather than spread yourselves in to figure out where the next growth will be there. There's enough headroom for growth in the existing 127 cities that we have. Got it. Third question, in your shareholder letter, you mentioned there is a 50 bps dilution on contribution margin led by lower commissions on non-grocery selection. Going ahead, as your mix moves more towards non-grocery and as AOV expands, directly, should we continue to see elevated pressure on contribution margin, or this was more like a one-off in the initial phase and margin should improve as the non-grocery mix improves? Yeah, Sachin, Rahul, I think obviously this was our first focused effort in trying to improve the non-grocery selection. Overall, over the last couple of quarters, we have also mentioned that our selection, where we were probably lagging a little bit, are now in most parts ahead of even, say, the available selection from competition. There is an effort that is required to be able to build the relationships, et cetera. Over time, we will see monetization continue to increase, including in the non-grocery part. The overall mix, as we said, is also net positive because if you look at the absolute contribution that you make in these larger ASP selling items or non-grocery, more than makes up on the percentage margin. We think it's going to be a calibrated approach. There is going to be advertising dollars that will also start getting unlocked as our overall share of this pie increases. We should not expect that there'll be a continued headwind. This is more of a one-time effort and the significant movement that we have been able to make. Over time, this will mean that we will go back to more category margins. Got it. Lastly, just a curious question. You have a standalone app on Instamart, and then there is a combined super app out there. When you look at your incremental consumers' work coming on the quick commerce service, is it more on the standalone app or is it mixed, and how to think about this? Yeah, it's a mix. The way to think about it is there are two ways we acquire consumers. One is from our existing app who have, say, never transacted on Instamart. The other are those who are independently, you know, coming to the app. It's a mix. The way we approach is that whatever works, you know, best for the end consumer is what we use. That has been the way for our success also as well. Got it. Thanks a lot. Thank you. The next question is from the line of Abhisek Banerjee from ICICI Securities. Please go ahead. Hey, hi. Thanks for the opportunity. My first question is to Amitesh. Great job on, you know, the AOV improvement. Trying to understand what can be the mix of non-grocery items going ahead. I mean, can this go up to 25% or 30%? If you could give, you know, some clarity on that. In regards to the number of orders, which we have seen moderate because, you know, there was some grossing up of orders and Max Saver, etc. How would you drive, you know, order growth going ahead? If you can, you know, talk on these two things, that would be really helpful. Yeah, sure. Over the last year, if you look from Q1 FY2025 to Q1 FY2026, we have grown from 6.6% to 18.5% of the non-grocery business. That will keep on going up. We look at it as a business in which the. Sorry to interrupt there. Mr. Banerjee, I would request you to mute your line on webcast. There is a follow-up. Yeah. You may proceed, sir. Yeah, we see this movement keep on going up. We look at our business as consumer penetration for each of the categories. The consumer penetration for non-grocery categories is extremely low, so there is enough headroom. You can expect these numbers to go up. We will not want to give specific guidance, but we believe that this upward trajectory will keep on going up further for the next few quarters at least. Sorry, what was the second question? Yeah, I was trying to understand. As this mix kind of improves, how do you build out your assortment further? You are already talking about a large proportion of your metro audience having 30,000 SKUs, right? Will that essentially drive it, and how do you increase the number of orders that are coming for MTU? Yeah, see, I'll try to explain both the order question as well as really this one. The way to think about it is, yes, increased assortment is for all the new use cases that consumers have. That is something that we have seen happening in metro as well as the T1, T2 cities as well. The increased assortment is also one of the reasons why it is happening. Of course, the penetration of these categories from a consumer point of view has also been on the increasing trend. Now, on the order question, which is also one of the things which is there, we believe that the focus that we put in on the headwind on the order was for two specific reasons. The first reason was that obviously we had acquired a lot of new customers at the end of the last quarter that led to a significant initial stage in which we saw a lower order contribution from them. The second thing is what we did is also kind of removed a lot of low AOV orders that were not accurate to our business. The third thing that we did was the Max Saver in which we really consolidated orders. We don't believe the first two reasons will be there for the subsequent quarter. The third reason will be there. The numbers will go up. The focus will be to make sure that the average order volume on the Max Saver side, we don't reduce. We are seeing a higher retention on the Max Saver orders as well, which is the reason why we are very confident on this specific approach as well. With regards to store expansion, we saw only 41 stores added here. A large part, almost 75% of the CapEx, which was done, was done in warehousing increase, right? How do we kind of look at CapEx trajectory going ahead? If you can, you know, give some broad guidelines on that. Sure. I think on the dark store side, as you've seen, the quarter four of the previous financial year is where we expanded the network at the largest. Even in the previous call, we had mentioned that going forward is going to be measured and derivative of growth versus us planting the flags because we believe that we have the network density and the overall geographical presence already established. You should see this as more of a measured approach on the dark store expansion. However, if you look at the overall capacity of the network that we have with the current, say, 4.3 million sq. ft. of warehousing of the dark store space that we currently have in the market, we can potentially even grow twice from where we are without having to add any store, right, theoretically. This basically means that there's not a lot of leverage that we will get as we scale from the existing network. Now, coming to the warehousing side, again, due to the fast growth that we have seen, which is 100%+ over the last couple of quarters, we've had to necessarily expand our footprint on the warehousing side, especially in the larger metros. A lot of that work has been completed, and some of it will be done over the next couple of quarters. As we have mentioned, it will be a more graded expansion of CapEx investments from here on because the capacity expansion is largely being done on the warehousing side also. Understood. That was very helpful. Just one last question from me on the food side. Again, another very solid performance in terms of 18.8% AOV growth, right? Are you seeing any change from the competitor in the food space? Are you seeing them becoming a little more aggressive there with new management, et cetera? Hi, this is Rohit here. I think food delivery is highly competitive always. We don't watch it from an internal management lens of another company. On On the point, we don't have any information more than you have, right? I think while we remain competitive, we are very focused, but no, I think that hasn't really figured much in our scheme of thinking or our decision-making or anything of that nature. Got it. Thank you. Thank you. We'll take the next question from the line of Sudheer Guntupalli from Kotak Mahindra AMC. Please go ahead. Hi team. Thanks for the opportunity. First question, follow-up to what Abhishek was asking on the AOV increase trend. Is there any seasonality in the current quarter which would have helped the very sharp increase in the AOV apart from the factors which you had already called out? I'll take that question. No, absolutely not. This is all based on the effort or the shaping that we have done for our business. Yeah, thanks, Amitesh. Maybe a question to Rahul. If I look at your larger competitor, the cost structure of Instamart is very similar to the cost structure of their entity, with the only exception being a dramatic differential on the AOV trend so far. Now that you have seen a very sharp convergence of AOV in the current quarter and you are just about 8-9% lower than where they are, is it fair to assume that the rest of the profitability structure items will fall in place with this kind of an AOV increase? Yes, thanks, Sudheer. I think if you look at the overall, say, cost in the business, there are these variable operating costs. There are the nature of, say, fixed costs that we incur in the business as well as some of the below the, you know, contribution margin cost. Amitesh talked about the below contribution margin cost. If I were to kind of look at our own trajectory from here on, one of the big spikes that we had to do was on the average order value. It's a key determinant, as you know. At the same time, not all the benefits could have been accrued during the same period when the habit formation was being made. We have started the journey. This 26% growth does not mean that we are calling out that we will not grow further. We continue to have the ambition to keep scaling the average order value as the overall mix increases, as the consumers start moving the entire household wallet, a large part of the household wallet to us, which we are seeing in the very, very sharp increase in our GOV per user metrics also. From here on, we believe that there is enough room for us to continue growing the average order value, and monetization necessarily follows immediately post that. Got it, Rahul. The second question is on the store addition trend. I do get your point that at 4.3 million sq. ft. of dark store space, we are not very different from that of our larger competitor. If I look at it, let's say having more stores versus having fewer and larger stores, how do you see the trade-off happening, especially in terms of the density of the network and your ability to reach the customer within that promised time of 10 to 15 minutes? I understand you are focusing on a larger store footprint, and you have added quite a bit of them in the last four months. Is it not the case that having more number of stores will necessarily mean that you are closer to the customer and your reachability to the customer will be better? Yeah, see, the way we build our network is based on our ability to deliver our orders for our consumer base at under 10 minutes. If you look at our metrics, whatever we have done as benchmarking internally as well, we see that we have an industry-best service promise for speed for the end consumer. First of all, our network is there that allows for it to essentially happen. The second thing is that there are various ways in which you can expand your network continuously, specifically if you want to add a lot of non-grocery assortment. One of the ways is to have larger stores versus smaller stores. The approach that we have taken is to have larger stores so that ultimately there is a basket benefit that also accrues because of that. We will continue to be on the path, and we believe that model that allows ourselves to be larger store, more number of continuous cards, as well as making sure that we are doing all the deliveries within 10 minutes is a network that we are in already. That's the reason we feel very extremely confident about as well. Thanks, Amitesh. Last question to Rahul. Any indication on the monthly EBITDA loss at Instamart for June month, and what would have been the payroll increase annual appraisal cycle impact for Instamart and for food delivery business in this quarter compared to the March quarter? No, I think we have called out that the overall increase that we have seen below CM costs, a little more than half is actually due to the appraisal cycle. That's something which from here on will start giving us leverage, right, because that's behind us. In terms of the EBITDA, I think we have talked about the contribution margin improvement trajectory and remain steadfast on being able to deliver it in the timeframe that we have given. We've also highlighted that our pace of expansion in the CM margin or the NCM margin negative reduction will be higher, which means that you should start baking that in. In terms of absolute EBITDA, it would be hard to call out, right, considering we are still very early stage in the quarter. We still don't know about how much more competitive intensity is going to increase, what is going to be the overall user additions that the category is going to see in this quarter. We will remain a little bit flexible. Don't want to box ourselves into a specific guidance on that. At the same time, things which are not. No, Rahul, I think I was asking for the June month, not July month. There is a trajectory buildup that happened in March towards the end, the losses would have peaked, and it would have come down over the course of the June quarter, month on month. June month is what I'm asking for, not July month. Directionally, June was lower than April, and that's because, as I said, there are a lot of leverage that has come through. At the same time, don't expect us to give a specific guidance on it in this current quarter. We want to retain that flexibility. Having said that, contribution margin is something which we are also pretty sure of being able to appropriate that. Very much appreciated. Thank you and all the very best. Thank you. The next question is from the line of Vijit Jain from Citigroup. Please go ahead. Yeah, hi. Thank you for the opportunity. My question first is, looks like non-grocery share increase is also significantly led by Max Saver. Is the assumption correct? If I try to understand how that is happening, essentially, if you were under-indexed to non-groceries with Max Saver, you put a lot of add-to-cart prompts for these non-grocery items, and with higher subsidies there, that explains all the take-rate impact and everything that we're seeing here. Is that an accurate understanding of how you are basically ramping up Max Saver and non-groceries here? No, see, Max Saver actually helps the grocery business a lot more. It's a basket-building proposition. For a lot of non-grocery, baskets are not built, right? The unit per order for non-groceries is extremely close to one. It actually impacts grossly more. All the effort that has gone into is through higher assortment, better offers for the consumer from the sellers for all those assortment is what is actually leading to these numbers. Our assortment used to be very small. If you look at it a year back, right now we are at definitely industry-leading assortment in those cases. Got it. My second question is, you said earlier in your comment that, going forward, investment from ecosystem players will make Max Saver more sustainable. Is that referring to better commissions they'll pay you or higher ad share? If you can talk about what you believe is your gap in terms of your ad revenues versus your larger peer, and is there any gap in ad product itself that you still need to build to kind of cover that gap? You see, when we speak about ecosystem, yes, it is investment from sellers, brands who see that opportunity as well. As and when consumers move channels, and this is effectively a movement of channel, brands would want to participate on it, and that will lead to their helping it happen as well. Yes, we believe ultimately that the take-rates will essentially go up because of those reasons as well. Right now, as Rahul was speaking, as in I spoke about it as well. The initial stages are more to make those movements happen faster. Sustainable will happen when we have more take-rates from sellers, higher ads from brands, and that will essentially lead to a movement which is there. We believe that there is headroom for ads as well. I can't compare on exactly what is the number for competition, but we believe that our ads have a headroom, and we have made movement in that, and that is a movement that we'll keep on doing as well. Got it. Thanks. My last question on the marketing spends, is it possible to kind of quantify how much of the marketing spends right now is directed towards just the driving downloads activations for the standalone app? I know the app has seen a lot of traction, the user growth on that looks pretty high. As that normalizes, will the marketing spends go down? Is that how one should understand this? Marketing spends on getting the consumer to our platform. The way I would want to break it down is brand and perf investment rather than specifically related to which platform, because we give the flexibility for that to happen. If it's the existing platform customers, if they choose to interact on Instamart, we don't stop that as well. The way to think about it is that yes, we have a higher proportion, you know, majority proportion of perf, lower proportion of brand. We believe that that is the right mix because it allows us to build an Instamart brand that drives a lot of organic as well and p erf is something that in situ allows us to get a lot more transaction further for the new customers who are actually there on the platform. I don't want to break it down necessarily into Instamart app versus Swiggy app. We leave that flexibility to the end consumer. Okay, sure. My question was actually just on the marketing spends, whether it is being directed more towards the Instamart standalone app. Thank you so much. Thank you. The next question is from the line of Gaurav Malhotra from Axis. Please go ahead. Yeah, hi. Good evening, everyone. Just wanted to check on a couple of things, firstly on quick commerce. While we understand that the capacity which has been built is good enough to almost double the GOV, the competition in terms of just the footprint densification is going much, much ahead. How do you think of the different strategies of this? Do you think that there is a risk that you are leaving out some white spaces in terms of expansion, whether it could be education or. Hey, hi, Harshra here. I think ultimately, as Amitesh had already talked about, there is a certain specific time in the top cities that we've already expanded into, which we are most excited about growing our franchise quite strongly. For densification, ultimately the question is, how does densification help? Densification helps in your ability to serve the consumers faster. As we'd already mentioned, we continue to have a good advantage in how we serve our consumers on delivery experience, and we're not going to let that be a reason for consumers to not be happy with Instamart. The moment for us is how are we serving our consumers? We don't see this coming in the way of serving our consumers. Just on the food part, we obviously are seeing activity. There is new competition, right? Also, the existing guys are trying to sort of ramp up to push up the growth a little bit. Are we seeing some sort of higher competitive intensity in, say, opening marketing? Have we started to see that on the food delivery side? There have been talks about one of the players entering the market. That That has not happened yet. In terms of overall competitive intensity in the market, last quarter was as competitive as ever, right? It was nothing unusual, I'll say. Do you think that in the quest to sort of push up the growth, even now you're not seeing any sort of change versus, say, 1Q in terms of the underlying competitive trends? What I can answer is that from our perspective, given the nature of this category, category creation happens across players, right? For us, it is very clear that we will want to continue to experiment and expand into, for example, affordability. You've seen the 99 store launch, right? Or on speed, which is too bold. Irrespective of competitive incentives, the responsibility of expansion of the market, because if you look at, we have commented at about 18.8% GOV growth, we'd love to see this trend slightly higher in the future quarter. This was our second highest growth quarter in the last two years, or eight or nine quarters. We'd love to see this higher. That hunger is there in the team to continue to push the boundaries there. It helps that we remain in the competitive category always on, where nothing is taken for granted, right? We show up every day and do our best. Just to tell you in terms of, if you're asking me if this AMJ from a competitive standpoint was very different from the last AMJ or the last O&D or last JFM, I won't say so. The intensity was pretty much similar. Just the last question on Bolt. You mentioned that in terms of order volume, it is upwards of 10%. From a GOV perspective, how do we think about this? Obviously, it's coming with slightly lesser AOV, but are you seeing like a higher frequency over there? Look, Bolt has remained in the range of 10% to 12% order contribution. What we are seeing here is it has only very limited sort of impact on AOV, right? At a platform level, it is not significantly diluted, right? On the other hand, because the delivery radius is much lower, the delivery costs are lower. The economics are actually quite close to the platform average. There's no compromise on that. On all today, we don't monetize anything on Bolt. For example, either from the restaurant side or from the partner or customer side, Bolt operates from a monetization angle similar to the platform. Those opportunities exist in the future once we have created enough love for the service. It is not something that we, within the range that is operating, even let's say it was 5% point higher, would I worry about the impact on managing contribution margin because of that? I think that's not the situation. Just one last question, a little bit tangential, right? In the U.S., we are seeing some, you know, the food delivery companies alluding to impact of certain medication happening, you know, on the eating out sort of frequency or ability of users. Is that something which you think can sort of impact here as well? I think Sriharsha here, honestly, even from our conversations with players in the U.S., it hasn't impacted even them in a big way. I think the answer here is wait and watch. This is one where probably the impact is further ahead on the hype cycle than reality. Yeah. Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Yeah, hi. Two questions for me. Firstly, your competitor is moving to an inventory model. Do you think that confers them any sort of substantive advantage, and any plans from your perspective to change the way you manage your inventory? The second question is on your rider apps. Today, are the apps from the rider side completely different for Instamart and for food delivery, or is there an overlap, and do you see any advantage in that overlap if there is? Thanks. Sure. First, on the current model that we have, we work with sellers, seller partners on our network. Currently, due to the overall domestic ownership that exists, we cannot do an inventory-led model. Having said that, if you look at since our IPO time, our domestic ownership has continuously kept increasing. We have more than doubled our domestic ownership to now crossing 40% in a very short time with increased participation of domestic fund houses. There could be a natural evolution that at some point in time in the future, we may consider our ability to also open up the inventory-led model business model. In terms of the overall benefit of that model, we do expect that to have an accretion of roughly 50 to 70 basis points. It is not meaningfully very high for us to make any inorganic moves. At the same time, at an appropriate time, depending on our ability to do any action on this, we will come back to you. On the delivery part. Sorry, can I ask you a rider app? Yes. On the rider app, we have a unified app. It's the same app which is used for both food and Instamart. Having said that, the riders for Instamart are almost now exclusive to Instamart. There is a little bit of overlap and cross-usage, but Instamart, given the scale and the prominence it has, has a delivery network which is dedicated to Instamart. Both are separate things. If your question was more around, is the network separated, the answer is, to a large extent, yes, right? In the sense of the app which is used to both recruit, onboard, and communicate with the delivery partners, it is the same app with different interfaces for Instamart and food where it needs to be. Understand. In some way, it's like the combined app, right? Where you'll have a different tab maybe for. That's correct. Rider on a different platform. Understand. Could the riders, I mean, at the same time, they may not be on both platforms, but could the same riders then still be on both the platforms at different points of time? They need to go through a bit of a process to shift between food and Instamart. Having said that, look, the reality of this space also is that gig workers work across platforms, right? Many of them. That's a fairly natural phenomenon in this model. All right. That's very useful. Thank you. Thank you. The next question is from the line of Rishi Junjunwala from IIFL. Please go ahead. Yeah, a couple of questions on the quick commerce side. Firstly, if you can remind in terms of the contribution margin breakeven, i n QC, I think you mentioned December this year or March next year. Does that still hold true? In case the competition eases off dramatically over the next six months, the potential benefit from lower promotional expenses, are you going to use it to try and expand some of the market share initiatives that you are taking and keep the trajectory of or the target of breakeven intact, or you can potentially reach that higher as well, earlier as well? Our guidance was between, say, December to June 2026, you know, so quarters. That's something which we had laid out in the previous call, and we are maintaining that guidance. As you have seen, that journey has already begun. In terms of whether competitive action reduces the intensity of discounting or spending, and how we are going to use it, I think it's more a point-in-time decision that we will make looking at the overall, you know, our ability to grow faster than competition. It's very hard for us to crystal ball today how we will use that additional margin, whether we will bank it or reinvest it. Got it. Second question is, if we look at the contribution loss per order as of this quarter, it was close to around INR 28. There is a INR 10 increase in revenue per order and a similar or a INR 9 increase in the direct cost per order. If we were to take it down to zero in the next three-to-five quarters, just trying to understand which part, whether revenue per order or cost per order, will be the bigger determinant or driver of that. It is two to four quarters because, you know, we have in terms of our guidance. I think there are, you know, both, you know, the monetization on the take rate side, you will see that improving, and also there is the leverage on the fixed cost and the operating cost side due to the basket building that we have been able to both demonstrate in the previous quarter as well as going forward. Okay. All right. Thank you. Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Thanks for the opportunity. On food delivery, how should we look at the margin trajectory from here? This quarter, you saw a dip. Was it largely because of lower rider availability and linked cost? The first one? Yeah. This is Rohit here. On the dip in this quarter, it is explained largely by the seasonality, right? This happens every Q1. If you look at last Q1 also, it was a similar impact. This is a season where the rider availability is structurally, we don't see issues with rider availability. It's a season where harvest season is there and some other impact comes through. We do have to invest a little bit more on the rider side to keep the fleet in line with demand. This we expect to correct back, and we are continuously on our guidance for 5% EBITDA margin in the medium term. What is the time frame for the medium term? We are not guiding to a particular quarter on this right now. Okay. Understood. Also, can you share your thoughts on the new players entering quick commerce and what are the challenges they face? Is that a risk? Aggression from new players, is that a risk for your contribution margin breakeven over the next three-to-five quarters? Yeah. It's Amitesh here. See, I think this category will keep on seeing a lot of heightened competition. We saw one significant player entering last year. We see another significant player entering right now. If you look at the history also, it has not had a significant impact on the growth of the top players in quick commerce. Because it's a very important hyperlocal assortment play, plus the right kind of offer for that particular hyperlocal area, plus building a supply chain that can address hyperlocal, which is like three kinds of capabilities that are harder to build. We will keep on seeing a lot of competition coming in. Their ability to make an inroad in the market will be lesser. The way to think about it is that is not the defining factor of heightened competition. We still believe the top players in this particular area will only determine the investment in this market as well as our ability to respond to that. Understood. Irrespective of the competitive intensity, you still feel confident that three-to-five quarters you should be able to breakeven? Absolutely. Lastly, on platform innovations, the losses have increased while revenue has decreased. Can you help me understand this? Yeah, largely the investment there is on our initiative around the 10-minute version on snack. How is that done? How is that done? This is our initiative where we have, Sriharsha, you would like to add? Yeah. Hi, Harshra here. It's still kind of month six for the category. I think there are still, we're in an early stage of iteration over here. We're taking a measured approach, having a certain narrow presence to understand with the critical mass of consumers. How to bring more consumer love into the offering, how the economics works. I think early news is that there is an incrementality to overall food delivery category. How exciting is this? How does this business play out over the future? Both like repeat retention-wise and economics-wise is, I think, a journey of discovery that we are on still. Understood. That's it for me. Thank you. Thank you. The next question is from the line of Nikhil Choudhary from Nuwama. Please go ahead. Yeah, thanks for the opportunity, and congratulations on the improvement on AOV side. Harshra, in the past, we have seen improvement in dark store profitability. It's led by two factors. One is higher AOV, and second is higher throughput for dark store, right? While AOV increased this quarter, we have seen a significant dip in throughput per dark store. Is it some trade-off which happened this quarter? Why I'm asking this is because of some of the changing policy in the last quarter we have seen on your platform that you started charging search fees, ring fees per order below INR 449, INR 499. In a way, is it fair to assume that, you know, customers clubbed some of the orders, which led to higher AOV but lower order per customer or lower platform frequency? Hi, Nikhil. This is Abhishek. Two reasons. One is, of course, we added a lot of stores in the last quarter, and that too significantly back-ended, as we've written in the shareholder letter also. Almost 150 stores were added in March itself. What has happened is that the full impact of those stores, which of course are not contributing as many orders for the full quarter, has dragged down that number. It is just that. The second is, of course, we've also let go of some low AOV orders overall. The third impact that you mentioned is around cart consolidation because of Max Saver. All three taken together is the reason why you see that the number in itself is sub-thousand, which also gives us the capacity to be able to grow without needing too many more stores. Got it. Fair enough. Now, moving to improvement in contribution margin. You know, the 16% increase in AOV should have led to 100 to 150 basis point increase in your contribution margin, right? Assuming, let's say, INR 55 as a delivery cost on INR 550, INR 540 as AOV, right? Is it fair to say that a large part of this benefit is now transferred to Max Saver users to generate the habit for now, and that will continue at least for the coming quarter for the habit to sustain? See, for the initial stages in Max Saver, habit formation will require some incentivization for the consumer that we were doing at that point of time. Otherwise, a hockey stick, you know, like this won't happen. That said, we have seen improvement in the Max Saver order profitability itself over the quarter in question. We believe with the ecosystem investments, ultimately our need for investing for the consumers will absolutely go down. You see that in the results for the subsequent quarters as well. It is already on a downward trend. It will continue on that. Got it. Thanks a lot for that. The last one on Bolt side, last quarter we highlighted, you know, contribution of Bolt being 12%. This time you mentioned it is higher than 10%. Have you seen some decline in overall contribution in Bolt? Was there some seasonality, or is this just a normal quarter anomaly and you expect Bolt to bounce back going forward? I think it has stayed in the same range. What we have done in Bolt over the last quarter is we have improved the consumer experience a lot more, right? This is a highly operationally complex service to run. We worked on two things. One is working a lot with restaurant partners to improve the readiness time of items, right? Cut part orders. There's a certain part of the orders which were not very aligned to the speed promise, right? We cut it out. Also, from our side, we improved delivery operations to improve the overall compliance. I think this quarter we have taken to just improve the offering to a far more loved offering from the consumer side, and the results are showing. The OC remains range-bound. We'll also keep it to a certain range given the nature of the service and our ability to operate because it also cuts out LM, right? The way Bolt operates, it operates in a certain LM and the density will grow over time there. Got it. Makes sense. Thanks a lot for that. Last one from my side is on SNACC. SNACC side, I think between the Bolt and SNACC. Choosing between the Bolt 10-minute and your own cloud kitchen SNACC app. Are we of belief and going more aggressive on, let's say, third-party 10-minute delivery while our competition is more focusing on their own 10-minute cloud kitchen delivery? Is it a fair understanding that we are more focused on the restaurant-led model while they are more on their own cloud kitchen-led model? No, I think at this point we don't have any biases around this is higher than that. I think it's a journey of exploration for us. We believe that if you're able to actually make restaurants deliver faster, that model overall food delivery through restaurants is a confirmed one. We believe that to push the boundary there, it is important to continue getting faster and faster. The case for SNACC is a different one. It opens up an entirely new consumption occasion for low involvement snacking and, you know, eats of that type. We don't have any specific biases internally on this or that. It just happens to be that both of them are at different stages of discovery. Bolt is a relatively more deterministic operation where, you know, there is a certain operating model and you use it to grow your business incrementally. SNACC is a wholly different zero to one. Our investments in each of these are going to be just a function of the stage that they're in. We are continuing to, like I said, we have a presence in two cities and we're going to continue playing to understand what the consumer love markers are and how the economics is going to shape up eventually. Got it. Makes sense. Thanks a lot and good luck for coming today. Thank you. Ladies and gentlemen, this will be the last question, which is from the line of Ashwin Mehta from Ambit Capital. Please go ahead. Hi. Thanks for the opportunity. Two questions. One, our FCF burn over the last two quarters is almost INR 2,800 crore. Our cash is more or less 2x of that. Would we need to raise equity or maybe monetize our Rapido stake to beef up cash? We have sufficient cash balance, right? I mean, INR 5,500 crores is not a small balance. At the same time, we have outlined our overall ability to not only make the investment choices that we are making on the Instamart business, which is both for growth as well as reigning in the contribution margin profitability, right? Which is again scale-led and maturity-led. From here on, we do have a strong balance sheet. We talked about the Rapido investment and maybe if I can invite Harshra. Hi, harsha here. That's a very parallel conversation which we're having based on the developing conflict of interest. When we got in to Rapido maybe two and a half years back, they were a mobility player doing really well. We wanted to partner with them on that journey. Even as early as back, we've had some conversations around potentially doing a partnership in food delivery also. Unfortunately, that didn't materialize and they've decided to get in the business themselves. Now that's just a wedge that has made us take notice of the conflict and therefore we're planning to go separate ways on this. Yeah, to answer your question, we have sufficient capital to make the investments, and we will keep you updated on a quarterly basis in terms of, you know, going forward position. Thank you for the clarification. Essentially, we don't need to raise the equity. In terms of the order growth in quick commerce, at just about 4%, that's an eight-quarter low in terms of order growth. Was cannibalization of your normal orders to Max Saver so aggressive? The assortment increase, as you already mentioned, should have given you one per unit kind of order increases. I just wanted to understand that better. See, of course, when somebody is ordering in Max Saver, their basket size for the month or whatever, the spend for the month won't go up. It will still be at the same level. It is not 100% cannibalized, but there is definitely a consolidation of orders that happens because of Max Saver. In general, the reason why we look at order per day is because we believe that leads to higher retention as well. What we have seen is that Max Saver more than sufficiently compensates for that. The people who use Max Saver have a higher retention in general. Our belief is that this is the right way to approach both basket building for the end consumer, making sure that they get great offers as well as making sure that they come back to our platform again and again. That is one thing that we want to do. The other thing is we also didn't want to have a lot of low AOV orders that were actually detrimental to our overall P&L as well as the quality of the user. That's one choice that we did in the same quarter. That is the reason you see a double impact of that, which is what I said, this has essentially bottomed out. We will see a higher number going forward. Sure. Thanks a lot, and all the best for the team [guess]. Thank you. As that was the last question, ladies and gentlemen, we will conclude the question and answer session now. On behalf of Swiggy Limited, we conclude this conference. Thank you for joining us and you may now disconnect your lines. Thank you.