Swiggy’s latest numbers show its dine-out arm has turned profitable for the first time. The company reported a Gross Order Value (GOV) of ₹1,118 crore for its dine-out arm in Q2 FY26, a 52% year-on-year (y-o-y) increase from ₹734 crore in the same quarter last year. Its adjusted Ebitda margin of +0.5% marks a small but symbolic operating profit of ₹6 crore, turning the corner after several loss-making quarters.
Eternal (Zomato), meanwhile, reports a Net Order Value (NOV) for its ‘District’ business, which includes dining, events, and retail. The vertical grew around 32% y-o-y, but remains in the red with an Ebitda margin of -3.1% and a quarterly loss of ₹63 crore. Eternal’s broader revenue base— ₹189 crore in Q2FY26 compared to Swiggy’s ₹88 crore—reflects a wider business mix, but also heavier operational intensity.
It’s important to note that Swiggy reports Gross Order Value (GOV), which is the total before discounts, whereas Zomato uses Net Order Value, the total after deducting partner commissions and discounts, a metric it argues better reflects the platform economics.
Zomato’s higher revenues are rooted in its more diversified business mix, which encompasses dining, events, and retail, while Swiggy’s topline reflects a narrower focus.
Analysts say the dine-out recovery is steady but is still finding its feet. The pickup is partly macro, thanks to office reopenings, consumer premiumisation, and partly behavioural, with loyalty programmes driving repeat visits, explains Sandeep Abhange, LKP Securities analyst.
Push for dining out
Dine-out had been sluggish for several quarters, largely because the convenience and discounts of food delivery cannibalised dine-in demand, especially on weekdays. Platforms’ heavy reliance on discounts further squeezed margins for both themselves and restaurants, a trend exacerbated by the pandemic.
Both Zomato and Swiggy report that their dine-out businesses contribute around 10-15% of their overall business, according to management commentary in their recent earnings calls.
Key Takeaways
- Swiggy’s dine-out arm achieved its first-ever operating profit in Q2F Y26, focusing on profitability in a narrower vertical. In contrast, Zomato is prioritizing scale and breadth in its wider ‘District’ business, which remains loss-making.
- Swiggy’s dine-out business reported a gross order value of ₹1,118 crore and an adjusted Ebitda margin of +0.5%, marking a symbolic turning point for dine-in.
- The dine-out recovery is driven by macroeconomic factors like office reopenings, consumer premiumization, and behavioural changes, including the success of loyalty programmes.
- Dine-in offers significantly higher margins for restaurants compared to delivery, giving them better leverage.
- The recovery’s long-term sustainability is questioned, as analysts note that current traction is heavily incentive-led due to consistent deep discounting.
Abhange adds that the goods and services tax (GST) rationalisation has provided “a measurable, though partial tailwind”, especially for organised restaurants and quick-commerce categories. “The tax change has improved partner-level economics, but the main driver remains behaviour, people are simply going out more.”
For restaurateurs, the recovery is visible but uneven. “We’ve seen 1-2% savings depending on the restaurant category, especially for QSRs (quick service restaurants) that rely on processed foods earlier taxed at 12%,” said Pranav Rungta, an industry veteran and vice president at National Restaurant Association of India (NRAI), adding that GST cuts have modestly improved input margins.
However, platforms still foot most of the bill for discounts and payment routing, a long-standing sore spot for the NRAI, which has repeatedly flagged deep discounting as distorting restaurant margins and consumer pricing.
Dine-in offers better margins than delivery since there’s no revenue share involved. “There is more leverage as the consumer is in direct touch with the outlet. Though aggregators are trying to take a piece of this business by offering reservation services with deep discounts,” Rungta said.
The NRAI has been advocating for fair trade terms and against arbitrary charges or fee increases by aggregators, “for which they [platforms] have been largely responsive,” he added.
But the bigger win is psychological—it helps restore pricing parity between eating in and ordering out, says Sagar Daryani, co-founder of Wow! Momo, and the president of NRAI.
“The same customer who’d order online every 45-60 days is now returning to their favourite QSR every 30-35 days,” said Daryani.
Change in behaviour
Dine-out bills also pad up the average order value (AOV).
Dine-out bills typically range between ₹1,600 and ₹2,200 per guest, increasing with cocktails, compared to ₹450-700 for delivery. Family bundles also reach ₹750-900 on weekends, according to Zorawar Kalra, founder of Massive Restaurants.
Kalra believes dine-out gives restaurants more leverage across the board, from landlord negotiations to supplier contracts, and even allows brands to push back gently on aggregator take rates.
But not everyone’s convinced this is a long-term turnaround. Footfalls and frequency are yet to show consistent recovery, as channels still lean on heavy discounting, while “online delivery continues to grow 18-20% annually, driven by habit and convenience,” said Karan Taurani, senior vice-president at Elara Capital, adding that discounts have risen consistently over the past two years, making current dine-out traction largely incentive-led rather than purely organic.
The recovery remains seasonal, though underlying consumer sentiment has turned firmer.
The combined out-of-home Gross Order Value for Swiggy and Zomato crossed ₹3,588 crore in Q1 FY26, up 38.9% y-o-y—a remarkable jump, but one that shows signs of flattening sequentially after festival peaks, according to data from Datum Intelligence. “Spending fatigue and wallet reallocation toward home delivery and quick commerce in metros are slowing momentum,” the firm notes.
For now, delivery continues to drive the volumes, but dine-out is quietly back on the table.
