Swiggy Ltd (NSE: SWIGGY) Q4 2025 Earnings Call dated May. 09, 2025
Corporate Participants:
Unidentified Speaker
Abhishek Agarwal — Head of Investor Relations
Sriharsha Majeti — MD and Group CEO
Rahul Bhotra — CFO
Rohit Kapoor — CEO of Food Marketplace
Amitesh Jha — CEO of Instamart
Analysts:
Unidentified Participant
Ankur Rudra — Analyst
Swapnil Port Duque — Analyst
Sachin — Analyst
Vijit Jain — Analyst
Vivek M — Analyst
Gaurav — Analyst
Sudhir Gantupalli — Analyst
Abhishek Banerjee — Analyst
Aditya Suresh — Analyst
Nikhil Chaudhary — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the earnings conference call of Swiggy Limited. 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 this conference, please signal an operator by pressing Star then zero on your touchstone 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.
Abhishek Agarwal — Head of Investor Relations
Thanks, operator. Hello everyone and welcome to the fourth quarter FY2025 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 pro forma information that we will provide on this call are management estimates based on certain assumptions and have not been subjected to any audit review or examination procedures.
Swiggy does not guarantee these statements and has not obliged them to update them at any time. Joining me on the call today are Sriharsha Majeti, our MD and Group CEO Rahul Bhotra, our cfo Rohit Kapoor, CEO of Food Marketplace and Amitesh Jha, CEO of Instamart. With this brief preamble, let us start the Q and A. Operator, you can please go ahead.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handpips while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take our first question from the line of Ankur Rudra from JP Morgan. Please go ahead.
Ankur Rudra — Analyst
Hi, thank you for taking my questions. I wanted to start on the food side of things. You made a statement about expanding your bolt initiatives to 500 cities. You’ve given us some color there as well. I just wanted to get a bit more clarity in terms of what your experience has been. This is in the context of your peer actually shutting this line of shorter duration food delivery down, suggesting demand has not been as helpful. Can you maybe talk about what you are seeing different, which gives you more confidence here?
Rohit Kapoor — CEO of Food Marketplace
Hi, this is Rohit here.
Let me take this question. So first of all, BOLT has grown at a fast clip and contributes 12% of overall order volumes today. Having said that, look, this is a category by itself in a way and I dare say not just in India but globally and it’s a less than six months vintage so we are building it very purposefully and thoughtfully. The AOVS and Bolt are within range of platform and there is no significant concern we have on the economics of this business. Obviously I can’t go into the details of economics for comparative reasons and just to provide more clarity, there are three parts to the Bolt order, so if you think about it, orders that have already been delivered in 10 minutes of which the percentage is very low because the network does need configuration towards let’s say 10 minutes or thereabouts delivery.
Second is orders where people choose 10 minutes over normal delivery on a platform because it just makes sense for them to do so in the need case. And third is actually incremental orders which are due to a new use case or some users that would not have been r core. Right. It’s a fairly decent number even at this early stage and we believe that we can continue to build this over time to become more and more relevant to the consumer from an incrementality standpoint. Equally important, both on two are very valuable to the platform. Also remember these orders are shorter distances so when you’re looking at economics just want to conclude it is not the AOB which matters but also the delivery cost of lower last miles.
Ankur Rudra — Analyst
Thank you, appreciate it. Just moving to the quick commerce side, I wanted to first get a comment on the net order value growth or the gov growth this time the Nov growth was around 16 ish percent gov around 20%. Now this is a bit of an acceleration but not meaningful given the context. You’ve had 3x the number of stored addition this time versus last quarter maybe can you talk about perspectives of what drove that difference versus last time? And if you can also add any updates on store addition from here given you’ve achieved your previous targets.
Amitesh Jha — CEO of Instamart
Yeah, absolutely. Hi, this is Amitesh here. You see the way we are looking at our growth is always in FSG3 metrics. One is how many MTUs that we are essentially adding. Our acceleration in growth has happened there essentially primarily how many stores we add and of course that results in what is the number of orders and the Nov that we essentially get from that context. Our growth or the indexation of our movement in this particular quarter was MPU growth was making sure that we open a lot more stores to expand our network since these customers that have been acquired are new and the stores that we have gone are new.
The overall spend per customer for this specific cohort will be lesser and which is the reason why you don’t see a really tie up between what we see in our MTU growth as well as in terms of our Nov growth. So the way to think about it is yes, we have expanded our business. We have invested in the right places to make sure that we have acquired customers. Making sure that we have higher repeat rates in the subsequent quarters will be the main focus of our business. On the other side, in terms of how many more store growth, we look at our stores in terms of two ways.
One is how many cities we are essentially going into and how deep we are actually going into our city. So from a context of last quarter it was mostly to you know, go into a lot more cities to understand the contour of how consumers are actually going to react in those specific cities. And the way we are going to look at it is based on those reactions we are going to look at deepening our presence in some of these universities to make sure that our expansion is more sharply focused rather than essentially widely focused.
Ankur Rudra — Analyst
Can you talk a bit more about the two new initiatives this time? One is on Max Saver. I know there’s only probably been a week in the last quarter, but maybe for this quarter. How does the unit economics for that look Given it’s a lot more value focused, is this going to dilute take rates and contribution profits? And similarly for megapods given that now you have quite a you any kind of color in terms of how does the store economics there looks versus any regular store at a similar stage of evolution. Thank you.
Amitesh Jha — CEO of Instamart
Sure. The. Okay the Mac Saver Ed and the megapods are mostly based on a consumer back understanding of that they need that there are various missions that will the consumers have. The primary mission that everyone was first really targeting towards was obviously to make sure that any kind of top up that is there in the grocery is what we essentially look at when we moved beyond our consumer base that are looking for more options. There are two primary use cases that came up. One is obviously the country being very value conscious can we provide some value to the end consumer.
And the second is that what are the options uniform that we have now Both of them are AOV accidental as well as making sure that we give more skus to the end consumer as well. Structurally the Max server option which kicks in for majority of the customers at greater than 99:89. So the economics overall is not very different. There is Obviously a discount that we give to the customers. But the fulfillment cost advantage that we get out of a higher order value allows us to be, you know, in terms allows it to be at the same essentially ballpark on the Mega Pod side which is incremental in terms of AOV for us as well as in the number of units that we are actually trying to sell.
You know, that is without any extra incremental cost on our variable spend. In terms of profitability for a megapod, see it is very hard to sell immediately because a lot of these megapods are new matured megapods which have come up in places where they were already mature. It has actually the highest profitability for us. So yes, if you look at maturity of the pod and the megapod existing is there, our probability is actually quite good because AOV is higher as well as the throughput is high.
operator
Thank you. We’ll take our next question from the line of Swapnil Port Duque from JM Financial. Please go ahead.
Swapnil Port Duque — Analyst
Hi, thanks for the opportunity and congratulations for a good performance in your food delivery business. But I have a few questions on your balance sheet side. I think there has been a significant decline in your cash balances this quarter by around 1500 crores which is meaningful. I can understand part of that is because of the losses in the commerce business. But then there is also a 500 crore increase in the working capital investments and capex of 425 crores. And this is despite the fact that the store adjustments is just about 300. I mean both numbers look to be significantly higher.
Rahul Bhotra — CFO
Sure, I can take that. Rahul. See if you look at our CapEx investments we have added 314 stores last quarter as well as we have been increasing our warehouse footprint and that has led to the overall CapEx deployment. We do believe that a large part of the overall CapEx cycle that we had started for this deployment journey is now behind us. And going forward you should see that reducing in a significant way. On the working capital side this is more of a point in time period. You should see some of it starting to come back. There is the difference between we have seen some of the advertising revenues that we collect from brands.
There has been an increase in the number of days outstanding but that should correct in the next quarter. So that is not a permanent change but more of an in the quarter change.
Swapnil Port Duque — Analyst
But Rahul, if I were to extend that question, see if our competitor has been reporting capex of around 1 crores including the dark store plus the housing and they also added around 300 crores of stores this quarter and their capex was in line that kind of a increase. But your store additions, I understand 360 is a fairly high number but still the CAPEX is 425. That that individually tells me that your spending could be spending significantly more on a per dark store capex.
Rahul Bhotra — CFO
No, that’s not correct. So as we had guided, you know our per dark store expenditure is much more than you know, 80 lakhs. It could be higher on the megapot but overall we don’t spend more than that. I think as I mentioned, our warehousing capacity expansion has been done. As you’ve seen, our growth has been accelerating over the last three quarters. Our growth has accelerated from 76% to 87% to 101% on a gov basis. And to support that accelerated growth, we have been increasing our overall warehousing footprint which I said which will help us deliver the next couple of years of growth.
Swapnil Port Duque — Analyst
Okay, and, and with respect to your working capital investments, you mentioned some increase in your ad income and that could have inflated that number. Understand. But still can you help us understand what was the increase, you know on in the ad income or any, any number to justify such a huge increase increase in your working capitals?
Rahul Bhotra — CFO
As I said, it is more of a collection efficiency and we do expect this to meaningfully come down in the next quarter. So you should not see this as a structural change in the overall working capital cycle of our business.
Swapnil Port Duque — Analyst
Okay, so the next question is on your guidance per se. Now it seems that you have tweaked your guidance twice post listing. First you stop kind of stopped giving the breakeven guidance for for instamart business. And now it seems your contribution margin break even timelines have also been changed from 3 QFI 26 to 8 goes up to 1 QFR 27. I mean are you guys feeling the pressures of the competitive intensity is significantly higher and that is why currently there is some decent amount of uncertainty in your instamark business per se.
Rahul Bhotra — CFO
Yes. See I think as we kind of go in the overall deployment of our storage function and the network, we have seen competitive pressure continuing to increase not only from the existing players but also there are a set of new players who are entering the market. So our guidance, while we do have maintained the three to five quarters, this gives us a certain amount of flexibility to invest behind growth especially in the geographical expansion that we have done. We do believe that there is a certain amount of customer addition that continues to be supported. If you have seen our numbers just in the last quarter we have added more users as compared to the last six quarters we added 2.8 million NTUs.
So there is a certain amount of growth investment that is required in an accelerated growth category and we want to therefore have the flexibility to be able to deploy some back into growth. And that is why the reason for the 3-5-4 margin guidance. Having said that, the peak of the contribution margin investment is behind us. As you’ve seen, our network has expanded very rapidly over the x2 of last financial year which means there’s a certain amount of underutilization of the cost that is sitting into our P and L which will start decreasing quarter on quarter from here on.
So you should start expecting the CM will improve on a quarterly basis from here on.
Swapnil Port Duque — Analyst
But how confident are you to to break even on the controversial margin level by 1.5 27 latees? Is there any positive. I mean just. I’m just trying to conceal because of the frequent changes that have happened.
Rahul Bhotra — CFO
So there are not any frequent changes. It’s. I said we had last mentioned about December quarter. As I said we have. We are seeking flexibility to over two more quarters. It would happen in December. It could happen in the June quarter of the next calendar year. We do have a certain plan for us to be able to achieve that. If you see most of the investment that have happened, a large part of it is in the underutilization of the network. A lot of our stores are currently less than three months old. Stores typically take anywhere between six to 12 months to hit a thousand OPD number which basically gets us to breakeven and the cash losses start reducing in those stores.
We have also invested in certain amount of customer incentives which is led slightly by competitive pressure but also by the overall size of the customer addition that we have done in the previous quarter on the trajectory itself.
Swapnil Port Duque — Analyst
And this is the last one on your fixed cost. In the Instamart business the fixed cost have been consistently higher than your the other listed player. Now your scale is decently smaller than the other player but still those costs remained significantly high for you. I mean is there any trajectory for to get a control over this cost? I presume this is mainly because of performance and brand marketing. But at some point of time this is the line item that you have to address if you were to break even at an EBITDA level. So any sense of how or what efforts you would be putting into control this cost?
Rahul Bhotra — CFO
If you see the overall deployment a large part of below CM cost are into performance marketing and brand marketing. As I Mentioned, we have added more users than we have added in the six cumulative quarters before the previous quarter. So there is the heightened level of investment which at some point in the future we do expect it to also start reducing the same time. We believe that if we are going to add as many users, it’s the right investment to also be making in the business in a phase when it is a very early stage of the overall journey itself.
So there are definitely market estimates that suggest that in the next three to four years the quick commerce industry itself could be anywhere between five to six times the current size. So that gives us the opportunity to continue building and into the right making the right kind of growth investments. But you should expect a lot of operating leverage because some of it is discretionary. We do expect to modulate it depending on how we see. As I had mentioned in the recent past, we had seen some amount of heightened competitive reasons and therefore the customer acquisition costs were higher.
Now, at any point in time, if it reduces, you will immediately see that benefit falling into below the CM line.
Swapnil Port Duque — Analyst
Got it, got it. Right, just last one.
Rahul Bhotra — CFO
Maybe I can reiterate on a structural basis, we don’t see any reason for us for you to believe that, you know, we have any fixed cost. Even in the food delivery business, you may have observed that we have delivered close to 80 basis points of operating leverage in the previous financial year. We have largely maintained our absolute fixed cost below CM at the same level over the last four quarters. So our ability to be able to maintain these fixed costs has already been demonstrated in other businesses that we operate and therefore pretty high confidence on our ability to also manage it in the business.
Swapnil Port Duque — Analyst
Just the last one, if I have so this max. So you mentioned about maxever launch and so just wanted to get a sense like the AOE for these customers are definitely higher, but what about the ordering frequencies? Is there any impact because customers bundle up their purchases in one order and is it possible that these customers do not come to the platform on a frequent basis? I’m just trying to get sense of how this business works. Thanks.
Amitesh Jha — CEO of Instamart
Yeah, it’s a bit early, honestly. I mean, we have not had a long time to see that. What is the complete impact of it? The right way to look at these impacts is over a longer period of time where they get used to MaxEver and other ways of eventually buying. As of now, this gives us the confidence that the spend per customer is actually going up based on the early days. But as I said, it’s early. We don’t want to comment till at least we have a quarter worth of spend and usability from the consumer side.
It will be responsible for us to stock any kind of long term consumer behavior before any quarter.
Swapnil Port Duque — Analyst
Got it. Thanks a lot.
operator
Thank you. We’ll take our next question from the line of Sachin from Bank of America. Please go ahead.
Sachin — Analyst
Thank you for the opportunity. I have three questions. First question is on competition in the commerce space. Clearly your comments do indicate that losses should go down from these levels and there are two parts to that. Right? One is store expansion which clearly there is a visibility you guys are not adding. But does this also imply that competition should also go down? Or what are your general thoughts on competition out here?
Rahul Bhotra — CFO
Yeah Now on the store expansion guiding that the acceleration won’t be similar to the previous quarter is more on the network design choices that we have. We believe that we have the necessary footprint both on the hyperlocal level as well as from a geographical coverage perspective to be able to add significantly more business with the existing store network. We will continue to densify. Having said that, we will continue to densify especially in the tier one town where typically when a store hits between two to two and a half thousand orders we basically break it into two so that expansion we will continue to do
Sachin — Analyst
okay. And Rahul, on competition, is that intensifying? Is it stable? Is it going down?
Rahul Bhotra — CFO
I think it is similar. I think from the existing Quick Commerce players we haven’t seen any magnitude of going up or down in the recent past. At the same time there is the expectation of newer set of competition coming in. But enough is not known yet to be able to give you specific guidance on that.
Sachin — Analyst
Second question, is there a major difference in terms of running a 1Pmodel and a 3Pmodel in terms of unit economics and does management have a focus to become an IOCC at some point in the future?
Rahul Bhotra — CFO
I’ll take that. So we’ve done the math. I think from overall economic standpoint we do believe that the magnitude of difference can’t be more than 30 basis points or 30 to 35 basis points. But at the same time it comes at the back of also inventory holding in your balance sheet and therefore the impact of the working capital. So it’s a choice to be made on the commercial model. I think it does provide a little bit more flexibility. I think that’s a fair point. But at the same time the commercials don’t necessarily justify for you to make any inorganic way to achieve to get there.
So we will be open to the idea. I think there are obviously the regulatory framework as well as our own domestic ownership which continues to go up since our listing and at some point in the future when we believe that is the right time, we may also want to consider it. But there is no plan in the near future. As I said, commercials also don’t have a screening reason for us to do it.
Sachin — Analyst
Okay, and last question is on the market share at Quick Commerce. There is a narrative which is going around that Swiggy is losing market share to the two other players in the market. This is the growth rates and others which are there in public domain. So just wanted to understand, you know, how does management look at market share in Quick Commerce? Is it important for a Pan India basis or is the focus, let’s say in specific areas where Swiggy wants to be a dominant player in that market.
Sriharsha Majeti — MD and Group CEO
Hi Harsha here. Thanks for the question. Firstly, I think it’s difficult to estimate market share accurately as the comparability of govs has been limited because of some non standard definitions.
Our Zena listed pair have now provided Nov which we hope will be a much better parameter and a real measure of consumer spend on the platform. But as we think about, let’s say the next few quarters, I think there are a few things that we’re excited about. First one is let’s say thanks to a lot of the work that we’ve been doing on maxwave and the assortment addition strategy that we’ve been talking about for a while, we do see the AMDS going up healthily. The second thing is, even though we’ve acquired so many users in the last quarter that Rahul was talking about, we’re very excited about the quality of the acquisition and the cohorts and how they’re playing out.
And this was asked even earlier. There are going to be some modulation in investments depending on which player we’re talking about. So all these things together make us feel like we’re going to. We’re feeling good about the relative position as we play it out in the market over the next few quarters. Okay, specific question on if we look at focused job, etc. Of course that is something that we do look at more closely. We constantly evaluate the markets where we can build a stronger right to win to generate better profit pools. Sorry, last question from my side.
You know, I mean in one of the earlier questions when the question was asked in terms of any target, in terms of further dark stores, there was no specific number being given. How should we look at it? Is it because you know, one of your listed peers is obviously saying 2,000 odd stores. And I do understand it may not be an apples to apples comparison because you guys do have megaports and so on so forth. So any framework we should look in terms of understanding, in terms of how one could think about the presence of Swiggy versus presence of other competitors on a pan India basis from a darkstore network perspective.
Rahul Bhotra — CFO
Sure Satya, I can take that. I think one thing we have to be rest assured is that in terms of the customer experience metrics, we want to deliver the best. So whether it is in the tier one towns or the newer geographies that we’ve entered, there is a certain network footprint that we have established which helps us to deliver the best customer experience metrics. So from here on, once the network is already laid out, we do believe that the store expansion should be a derivative of growth and not the other way around which was hitherto the reason for us to have expanded so rapidly.
So you should expect a certain amount of gradation that’s going to happen in terms of our store additions. The reason we want to also keep a little bit of agility here is we don’t know how quickly the market will continue to accelerate. So our decision to open a store and have it live is 60 days and therefore we do want to maintain the flexibility without having to necessarily guide to a certain number. I think in the initial phase the expansion was necessary, but from here on I think growth is going to drive our overall densification as well as establishing the newer footprint.
Sachin — Analyst
Thank you. Very clear. All the best.
operator
Thank you. Take our next question from the line of Vijit Jain from Sitti. Please go ahead.
Vijit Jain — Analyst
Hi, thanks. My first question is on the food delivery business, right? For Bold, can you comment on, you know, for mature food users, users who’ve been on your platform for a while. Have you seen any impact on frequency. Since you launched Bold? And yeah, and I’ll just follow up with next questions on QOOP data.
Rohit Kapoor — CEO of Food Marketplace
So the question is around whether the existing users are increasing frequency because of Bolt.
Vijit Jain — Analyst
Yes, I mean just the sense that. Faster delivery, does it increase use case in that sense for existing users as well?
Rohit Kapoor — CEO of Food Marketplace
No, absolutely. I think not just Bolt. We see consistently in our data that whenever the deliveries are faster, people tend to convert more that particular session. So that holds linearly on the platform. And Bolt is Obviously at a 10 minute range, the fastest of the options we have. So we do see that incrementality.
Vijit Jain — Analyst
Correct, thanks. My question on Quick Commerce is first the NovGov gap in quick Commerce that you highlighted here went from 85% to 76% in two quarters and I know. You’Ve commented in the letter that about. 250Bps impact on contribution came from discounts. So in general would you say that a third of the discounts are being borne by you in this and the. Rest is being borne by, you know. Credit card and other partners? Is that how I should look at it?
Rahul Bhotra — CFO
No. See overall, you know the Nov is not just a factor of also our expanding, you know, selection. So as a share of overall non grocery increases you should expect that there will be a higher margin that currently the other categories operate on. So it’s a structure of the mix that we have as well as some of the customer incentives that we have to do for especially new users who come to the platform where there could be some amount of deliveries to build habit that we continue to provide to them.
Vijit Jain — Analyst
Correct Rahul, my next question is on the performance marketing spends that you were talking about earlier. Now how much of the spends that have gone up in the last two. Quarters as a consequence of increasing cost per impression and those kinds of things versus how you’ve accelerated your efforts towards reaching more people? And I guess my question is because at some point of time if you see MTU’s growth slowing somewhat because industries capturing all the low hanging fruit, will the performance marketing spend disproportionately go down?
Rahul Bhotra — CFO
Yeah, I think in the near term it did get impacted a by the size of the user acquisition that we have done. As you may have seen, we have added more users compared to the previous six quarters cumulatively. So there is a certain amount of absolute increase that we have had in the previous quarter. The same time because of competitive reason, the customer acquisition cost also went up. We started to see some signs of that coming down. So in the current quarter we are seeing better efficiencies on the customer acquisition side and if there is normalcy that will return, I think we should expect some bit of efficiencies there in terms of the absolute spending.
I think it’s going to be a factor of the market growth. It’s very hard to guess how much of this growth will continue, whether it will accelerate or there’ll be some bit of bumps along the way. So I think we are going to modulate it on a near time basis and make those appropriate decisions.
Vijit Jain — Analyst
Correct. And my last question, just so you know, your cash burn obviously in this quarter is 10 billion thereabouts in terms of operating cash burn and you’ve mentioned your cash balance as well. So in Terms of, you know, that we show, you know, how should one think about your cash burn Runway that. You’Re comfortable with given this cash balance. Thank you.
Rahul Bhotra — CFO
Sure. So yes, two things, right. One is if you look at the trajectory of our food delivery business, it is now run rating at close to 1000 crore EBITDA. So that is a cash flow that we continue want to build on the same time quick commerce. There is a certain amount of investment outlay that we have outlined. What we are guiding is that we believe that the peak of the investment should be behind us especially as we ramp up on our operating efficiencies as the network density and the utilization increases. We should see that starting to come off.
Currently we have a very strong balance sheet as you see 6,700 crores and the cash, you know, food delivery business and the dine out business also turning profitable which continue to accrue to the treasury balance. So yeah, feeling pretty good about the, you know, the strength of the balance sheet.
Vijit Jain — Analyst
Thank you so much.
operator
Thank you. We’ll take our next question. Question from the line of Vivek M from Jeffrey, please go ahead.
Vivek M — Analyst
Hi, good evening team. First on the food delivery business. So you know there are a lot of discretionary companies which are talking about slowdown, you know, in general in the urban market. So does that worry you from. So this quarter, you know, has been good for you from a, from a growth perspective. But does that worry you as you head into F26?
Rohit Kapoor — CEO of Food Marketplace
Hi, this is Rohit. Let me take that look. The macro is too volatile for us to talk about or get a clear read on the impact since there are multiple moving parts including recent geopolitical changes which are happening overall.
If I disregard that, we haven’t seen as much of a slowdown as being talked about. We’ve always spoken about 18 to 22% kind of year on year growth guidance and we are towards the lower end of that range. This business will be some months or quarters above or below as would be the case for any discretionary category. Having said that, I do recognize that as a category we need to innovate more to grow above 20% and we’re trying to see multiple different innovations to see what really sticks to the consumer. So for example bolt is 1000 speed.
There’s enough work happening in value and I think more will happen there. And differentiation for example, with UN black. So again is the category right now from our perspective trending towards the lower end of the guidance? That’s correct, but I think that’s the rough zone that we have seen. I continue to be a very, very strong believer in the long term potential of the category given the penetration levels, etc. But that has to play out and that will be cleared by not just by the market but also our efforts towards innovation.
Vivek M — Analyst
So Rohit, basically what you are saying is 18 to 22% is the broad bracket and at this point of time 18% is something you think the category or the segment can grow in F26.
Is that fair? Last quarter we came in at 70.6% growth. So it is towards the effect towards the lower end of that. I think the one thing which frankly is very hard to say is where the macro is also given the geopolitical situation. Sure, I understand. Thank you for that. On the adjusted food margin, so there is a steady margin expansion over, let’s say actually over the last eight quarters as we head into F26. What should we be expecting, let’s say on a full year basis in F26?
Rahul Bhotra — CFO
I’ll take that. So I think we don’t give specific guidance in terms of what will be the incremental EBITDA that we will gain. At the same time you may have observed that we have added close to 80 basis points on operating leverage which you should continue to expect. We have been able to keep a very close handle on the overall fixed cost into the business and largely keeping it flat while the business has grown over the previous year. So there is an amount of operating leverage at the same time contribution margin. There is an expansion that we expect by another 100 to 150 basis points to hit to our steady state EBITDA guidance.
So you should expect the trajectory to continue at the same time. There could be quarters where there could be ups and downs and there could be certain amount of investment that we may make for growth. But the largely the trajectory on an upward one should continue over a full year basis.
Vivek M — Analyst
Got it Rahul. And moving to Quick Commerce, your aov, you know, let’s say moderated slightly on a quarter on quarter basis basis, very slightly. But I would have, and there is of course a seasonality between third and fourth quarter. But I would have thought at the time when you know, you have expanded the dark stores, you know, built mega pods and also, you know, improve the assortment. Why I would have imagined that AOVs could have actually, you know, could have actually moved up given that, you know, your competitor still has is sitting on a higher aov.
How, how do you think about this?
Rahul Bhotra — CFO
Sure, I think it’s an important, you know, KPI and we have also, you know, you know holding us accountable to this KPI. We have continued to guide that. You know we will be doing double digit. If you observe that we have now upped this guidance. We expect that over the coming year we will be able to deliver high teens growth on the eov. So feel very comfortable about the trajectory. I think it was also a factor of the overall assortment that we had the share of the larger buckets more recently which the max saver that we have launched.
There are most of factors that are going to help us be able to deliver on the overall guidance that we are giving which is high teens growth from here on.
Amitesh Jha — CEO of Instamart
And I think the second part of the question which was on acquiring new customers and that still leading to a higher aoe. I think Harsha essentially mentioned about good quality users leading to a better quality business in the future as well. So what we have done and we have been consistently doing over the last two quarters is to make sure when we acquire customers, we acquire customers with the right basics in mind. And that is the reason why even though the sometimes the frequency is low, we have kept our AOE as a very important guardrail in the way that we have been acquiring customers and also repeating them with us.
So the reason why it has not followed that trend, and this is the only exception to the new customer trend is because we are acquiring customers heavily and repeating them far easily than earlier.
Vivek M — Analyst
Got it. And the last bit is on quick commerce growth. So you know there has been an acceleration, meaningful acceleration through the course of the year in terms of, you know, even YUI growth. Also the exit number of course you have let’s say doubled. Gov, how do you think about FY26? Because the investments on the dark store side will be lesser as you alluded to, whereas the competition is still, you know, adding stores. So I don’t know how much of that will come in the existing cities versus new cities, densification, etc. But so two parts. One is on your growth and the second bit is, you know, by not adding stores and matching the competition in a way, does that mean that your growth can actually then therefore trail, let’s say the overall industry or the.
Or let’s say the other two players.
Sriharsha Majeti — MD and Group CEO
Hi Harsha here. I think for us the growth most of these businesses for us is obviously a combination of MTU and AMV and you continue to have a very competitive view on both of these. Just discuss the AMD part itself. And as we mentioned, I think for the competitive position we want, we feel good about the coverage we have for the NTUs that we need. So in terms of an overall growth, overall, the trajectory in the NTUs, the quality of the cohorts, as well as our push on the AMDs give us very good confidence about the overall market position.
Vivek M — Analyst
Got it, Got it. Wish you all the best, Harshankeep. Thank you.
operator
Thank you. We’ll take our next question from the line of Gaurav from Axis. Please go ahead.
Gaurav — Analyst
Hi. Thank you for the opportunity. Just a couple of questions. One question is on, given that all these have been given pretty chunky discounts to the consumers, how difficult will it be for you guys to sort of wean away the consumer from discounting and still retain them? Maybe you retain them, but the kind of spend which they are currently doing.
Sriharsha Majeti — MD and Group CEO
Yeah, so, okay, so the way to think about the business is the incentives that you give to the consumer are trials, basically on what they want to experience as an end consumer. So the program that we have is very oriented towards making sure that they transact X number of times. We give a specific value prop to the consumer that we believe is sticky enough for them to come back to us. We look at our retention numbers all over the last few quarters. Upping up the value proposition is leading to customers sticking with us for a higher frequency as well.
So the way we are looking at it, incentives are for trials. Incentives are for making sure that they experience our value prop a lot more. Once that is done, we see a lot more stickiness in spite of those incentives essentially going away. It’s a very tried and tested way that we have followed and we believe that it will essentially work. And we see that in our higher retention numbers as well.
Gaurav — Analyst
If I can just sort of deliberate a little bit on that as well. The higher spend which you, which that costs, which you have showed, which you disclosed. But that is coming again at a time when the discounting has sort of moved up. Right. So at some point in time, I would presume that the discounting would have to sort of come down. Or do you think that the discounting levels are here to stay and that means that these pensive products kind of remain at these levels.
Sriharsha Majeti — MD and Group CEO
Yeah. See, the. Okay, the way to think about our, our acquisition as well is that. Okay. There are various cohorts in our, in our businesses as well. Okay. There are mature cohorts, there are cohorts which are new and there are, you know, cohorts which have essentially tried our platform as well. Whenever a cohort becomes mature, they don’t actually need any kind of incentive for them to be operating on our, on our platform, and that we have seen consistently, the retention rate, the repeat rate, keeps on going up without any incentive at all. So the way to think about it is that the incentives are very focused on a specific kind of cohort to make sure that they keep on the platform.
And once they get used to the platform, it doesn’t require any kind of incentive to essentially make it up as well. And that is something that we have seen in our retention numbers as well. Over multiple quarters, the retention has essentially gone up and we see that essentially going up again and again as well. So if you look at the shareholder letter point number six as well, that specifically speaks about our retention rate over the various quarters of acquisition of the interviewer. It has always been essentially going up. The reason of that is because when the consumers are actually getting matured, they’re getting used to the platform organically without any incentive, and we see that keep on happening again and again.
The heightened incentive is just to make sure that there are a lot of new consumers that we are acquiring. We make sure that they get used to this platform faster.
Gaurav — Analyst
What would be the timeline for a user to go from a new to a more mature user, at which time, you know, they don’t require the incentives to keep transacting.
Sriharsha Majeti — MD and Group CEO
So it’s varied. We don’t give specific, you know, guidance, and it’s a very competitive information that we don’t want to share. It varies based on which geography that we are, you know, we are speaking about. But it is a very minimal number of, you know, transaction that, that allows a consumer to believe that they want to be with this platform or not. Beyond that specific number of transaction, it really doesn’t matter. They’re already, they’re either going to be your user or not. So, you know, that’s the way we essentially look at it. But that specific information is something that we would not like to share because it is competitive in nature.
Gaurav — Analyst
Got it. This last question, you know, you guys mentioned new competition which was eluded by your peer as well. So, you know, end of the day, how many dark stores in a particular area can there be? Right? There are already three. There are potentially two more. So how do we think about how many players can at least the top 10 cities, which is where most of the business is coming from currently, can potentially have in a particular locality? I think, as Rahul mentioned, we are still maybe 20, 30% done. When you like, look at the overall scheme of the market, I feel it’s too early to already be clairvoyant about how many stores and how many companies can operate.
I think it’s a rapidly evolving market. So I don’t think we have a very pointed view on this.
Sriharsha Majeti — MD and Group CEO
And if you look at the. I mean in general market growth that we are seeing and the market penetrations, I don’t think we are. We are facing a level at which it looks like that there will be growth challenges for India.
Gaurav — Analyst
Understood. Thank you.
operator
Thank you. We’ll take our next question from the line of Sudhir Gantupalli from Kotak Mahindra amc. Please go ahead.
Sudhir Gantupalli — Analyst
Hey. Hi. Thanks for the opportunity. My first question is on Instamart growth. So for FY26 you’re essentially saying that you’ll be more graded in terms of store editions. So despite being more graded in terms of store addition, can we expect the Gov Instamar in FY26 could potentially double given the exit run rate of stores you have and 40% odd MTU growth sequentially in this quarter?
Amitesh Jha — CEO of Instamart
Yeah, absolutely. I think what we can look at is an acceleration of growth based on two fundamentals. Number of consumers that we have acquired and AOV movement that we have seen. Peru transaction as well. We believe that that combination would allow us to keep on growing at a significant higher rate as we have seen essentially earlier as well.
Sudhir Gantupalli — Analyst
Sure. Amitesh. And this NPU growth is 40% on a Q4Q basis. However, that has not materialized into Gov growth. So I’m just assuming this might be a timing mismatch, timing lag wherein some of these users might have been acquired or scores would have been added towards the end and the Gov growth proportionate will actually get slipped into the subsequent quarter. Is that the right way of inserting this data point?
Amitesh Jha — CEO of Instamart
See, obviously our NPU growth is essentially higher than our Gov and OPD growth. The way to look at it is that early consumers, be it whatever quarter, whatever time that you acquire, will be spending less in that specific quarter. It’s a mixed impact cohort wise. If you look at it, the cohort numbers on both Gov per customer and OPD customer remains the same. It’s a mixed impact that will get initially covered as soon as that mix gets essentially corrected.
Sudhir Gantupalli — Analyst
Got it. And second question to Rahul on instrument margins. So if I understand your earlier response right, you’re basically saying that contribution breakeven can still happen in December 25th and you’re just keeping some flexibility for growth investments when you essentially mention three to five quarters. So this may not necessarily be construed as a delay in terms of your Contribution breakeven guidance. Is that a correct interpretation? Operator, are we.
operator
Yes.
Unidentified Speaker
Could you rejoin Sudhir please?
operator
Mr. Guntupalli, you’re there on the call, right?
Sudhir Gantupalli — Analyst
Yes, yes, can you hear me now?
operator
Yes, we can hear you.
Unidentified Speaker
Yes.
Sudhir Gantupalli — Analyst
Yeah, I don’t know how much is there but I’ll repeat the question. So if I understand your earlier response right, you’re basically saying the contribution break even can still happen in December 25th quarter and you are just keeping some flexibility for growth investments. When you say three to five quarters. So this may not necessarily be construed as a delay in terms of your profitability guidance. Is that understanding correct?
Rahul Bhotra — CFO
So yes, I think as I mentioned that there are factors which are within our control and some factors which are beyond our control. So I think us being able to take this flexibility is more to take into factor outside our control versus within our control.
Sudhir Gantupalli — Analyst
And last question is to Rohit in food delivery. So I think last quarter when we met in the call also we discussed that December and Jan would probably be the true point or lowest point in terms of demand for food delivery. And we were expecting that to improve on a month on month basis in February and then subsequently in March. So did the trajectory play out that way if we just keep aside the recent geopolitical issues and all? Yes, I think we did see it play out that way where February and March were stronger than January.
Also remember this is a February which was a 2018 months. So there is that effect. Got it team, thank you so much. All the very best.
operator
Thank you. We’ll take our next question from the line of Abhishek Banerjee from ICICI Securities. Please go ahead.
Abhishek Banerjee — Analyst
So my first question is with regards to food delivery. So you have again seemed to gain a little bit of market share. So any thoughts on what you’re kind of doing right here? And I mean do you really think that market share gains are sustainable beyond this quarter as well?
Rohit Kapoor — CEO of Food Marketplace
Look, I’ll not like to comment on market share per se because it’s very hard to define what we are treating in the market here. But in terms of general growth, I think we have already spoken about it in the call. We continue to believe that the platform is very strong.
I think we have all the core parts of the platform very solid operating across the team. So there is, there are hardly zones of cities where we don’t feel that operations or supply or things are not in a very good place. I think teams have been stable. Teams have been there for most of our leadership is now significant vintage in the Food delivery space, understand the category well. So there are some fundamental basics which are operating for us. On top of that, what I do believe is that in a category like this, innovation and trial must continue.
And you’ve seen that coming through over last year, including some which have worked, some which have not worked. That’s fine. I think we’ll continue to operate in that zone where the chassis, the platform, the team continue to be stable. On top of that we have Bolt and other things and we’ll keep trying. I think that’s the zone we are operating and whether if that leads to higher growth in category, I think we’ll take it any day. But that’s not what we operate towards on a daily basis. And obviously if you look at margin expansion, I think that’s a very important variable.
I think we’ll continue to focus on keeping a fair balance between growth and continue to expand margins over time. There will be quarters where we’ll see some between the both. Either could be because of wage inflation kicks into a particular quarter or the seasonality where you have to spend more on the delivery network to keep the fleet there. But those are very known sort of variables in the category.
Abhishek Banerjee — Analyst
Understood.
Sriharsha Majeti — MD and Group CEO
Build on top also I think over the last couple of years, I think thanks to the team, therefore we’ve stabilized a lot of our operations. Like our account management is on an all time high.
But more importantly, I think what we’re cautiously excited about is the innovation engine firing, I think across multiple parts. If you think about value, we’ve been constantly throwing stuff in front of the consumer to see if that catches their imagination. For the experience side, we’ve launched Black for speed, we’ve launched Bolt, so we’re feeling good about like the inputs firing and we hope some of these materialize even more in the coming years.
Abhishek Banerjee — Analyst
Understood, Understood. Now if I look at the you know, contribution margin level so beyond now, so I am guessing you would also want to achieve a 4 to 5% kind of adjusted EBITDA margin as a proportion of gov in food.
Right. But when I see, you know, your adjusted EBITDA margin improvement in this quarter. It is broadly in line with the. Contribution margin improvement which I don’t think should be the case given, you know, you should be getting some scale benefits. So why has that happened in food? And you know, what is the outlook on this going forward?
Rahul Bhotra — CFO
Yeah, if you look on a full year basis I think we have added 80 basis points on the operating leverage. So among within quarters there could be certain variation. But overall if you look at on A full year basis. There has been significant operating leverage that we have accrued. We are also, I know, hoping that this will continue in the future. We will continue to accrue a lot more operating leverage in the future also.
Abhishek Banerjee — Analyst
Understood. So I was trying to get to. A point that your competitor actually had mentioned that there were some problems in getting the delivery feed in this quarter, especially in food delivery. So. So was that something you also kind of faced? I mean, there was some paucity of delivery drivers.
Rohit Kapoor — CEO of Food Marketplace
Let me take this because the correct thing for me to say is that we haven’t seen anything unusual, right, in the last quarter. There are parts of the quarter where, for example, during holy, where there is a delivery fleet which comes under some pressure for a few days. But that happens every year. That’s not nothing new. So at least in our network we haven’t seen anything unusual play out over the last quarter.
Abhishek Banerjee — Analyst
Understood. Now if I come to quick comments.
operator
Join back the queue please as we have other participants waiting for their turn. Thank you.
Abhishek Banerjee — Analyst
No, just one question and then you can, you know, so in terms of quick commerce, right, you have a contribution margin, you know, which has gone to minus 5.6% and that I believe that you’ve already reached 100 cities. Right. So in terms of outlook from now, do you really see city expansion as something you have to do beyond the 100 cities?
Amitesh Jha — CEO of Instamart
No, I think as I, as we have essentially mentioned in the, in the shareholder letter as well, we don’t see expansion in number of cities as the typical way of doing. We see deepening in those, in those cities, acquiring more customers after the network has been set in those cities as the way to go essentially for it as well. So yes, so in terms of the cities that we are essentially going will be at the same or similar kind of numbers. Whatever stores that we’ll be adding will be in those cities and effectively deepening the network there.
And that’s the study that we are actually taking forward.
Abhishek Banerjee — Analyst
Therefore your capex requirements per store edition. Will actually keep going down. Right. Even on a per store edition.
Amitesh Jha — CEO of Instamart
The CAPEX requirement per store edition will not essentially go down because effectively the cost associated, you know, essentially remains the same range down to around 70 to 80 lakh. We don’t see that essentially going down. Of course, utilization of the stores that we have added will essentially go up in the, in the subsequent quarters and that should be factored in when we are looking at contribution margin in the subsequent quarters as well.
Abhishek Banerjee — Analyst
I was not meaning just for the store, I was saying that there is an associated cost of adding warehouses and all when you are adding a new city. Right. So if that is no longer required. Therefore those costs don’t go up.
Amitesh Jha — CEO of Instamart
Yes, that’s correct.
Abhishek Banerjee — Analyst
That’s absolutely. And just one last question. In out of home consumption you have. Actually turned around and you know, you have shown profitability. So what is the outlook here in. Terms of growth going ahead and where. Can this profitability number go on? That’s all. Those are all my questions.
Rahul Bhotra — CFO
Sure. So see if you’ve seen, you know, since the acquisition over the last couple of years we have seen a very dramatic, you know, change in the trajectory of both profitability as well as growth. We do expect that this business at the steady state again can deliver the zip code of 4% positive EBITDA for us and we expect the growth trajectory to continue. There are some interesting events, businesses, etc. Through swiggy scenes that we have also launched which help our restaurant partners to get more traffic especially and create a lot more demand during the event days.
So we are seeing good traction. We also continuing to invest in providing them solutions outside the core offerings and therefore that will also over time aid into both growth as well as profitability.
Abhishek Banerjee — Analyst
Understood.
Rohit Kapoor — CEO of Food Marketplace
I just want to add to which Rahul said is on this category. We continue to index more on investing for growth because it’s very early days for the category and having broken even, I think we’ll modulate to the 4,5% that Charles pointed out over a period of time. But it’s very exciting I think the way we are. I think this is a category which the acquisition which we did two, two and a half years back and the business has grown manifold from there both in terms of scale and profitability. So has been a good success story for us in terms of acquiring a very good asset and then building onto it in a very solid way.
Abhishek Banerjee — Analyst
Understood.
operator
Thanks so much.
operator
Ladies and gentlemen, due to time constraints, we request you to restrict to one question at a time, please. We’ll take our next question from the line of Aditya Suresh from Macquarie. Please go ahead.
Aditya Suresh — Analyst
Thank you for the opportunity. I just wanted to double click on your responses in question seven. So is there any implicit market share. Assumption in your comments? Sorry, market structure assumption in your comments?
Sriharsha Majeti — MD and Group CEO
Sorry, can you repeat the question? Like what is the question?
Aditya Suresh — Analyst
So just on quick commerce and your comments that you speak about in the path towards contribution breakeven, is there an. Implicit market structure assumption? Two players, five players, seven players?
Sriharsha Majeti — MD and Group CEO
No, no, there is no such implicit assumptions in these. Okay.
Aditya Suresh — Analyst
Just as a follow up on that.
operator
Aditya, I request you to join Back the queue please. Thank you. We’ll take our next question from the line of Nikhil Chaudhary from Nuama. Please go ahead.
Nikhil Chaudhary — Analyst
I thanks for the opportunity. Just want clarity on your comment regarding the disconnect between MTU growth and Gov growth where you highlighted that while this quarter gov growth is driven by new user addition, while you have seen slowdown in older users. Have you seen this kind of seasonality before and why you think this is not a user churn because of higher competitive intensity. Thank you
Sriharsha Majeti — MD and Group CEO
so hi Harsha here we keep closely watching our metrics overall firstly as Rahul mentioned is unprecedented acquisition win for us because for the quick commerce business is different. This is the sum of 6/4 of NT growth for us that has happened in the last quarter.
To that end it is unprecedented and as we’ve already mentioned, we’re constantly looking at the quality of the overall cohorts and the retention of our mature users. We don’t see the impact of intensity showing up actually on the retention of our users.
Amitesh Jha — CEO of Instamart
Just to clarify, every cohort is operating in a similar way and better compared to what we were essentially earlier. So just to get them, the only delta that you see many of the aspect is just a tilt on the mix. Yes, our mature customers are retaining and spending in the earlier way or better and which is the way that we want to grow our business as well.
Nikhil Chaudhary — Analyst
Okay, thank you.
operator
Thank you ladies and gentlemen. Due to time constraints, we’ll take that as the last question for today on behalf of Swiggy limited that concludes this conference. Thank you all for joining us. You may now disconnect your lines.