Dine-out sees a facelift as Swiggy tastes profits while Zomato builds breadth

Swiggy’s latest figures show that its dining-out arm has become profitable for the first time. The company reported Gross Order Value (GOV) as follows: ₹1,118 crore for dining out arm in the second quarter of FY26, up 52% ​​YoY ₹734 crore in the same quarter last year. Adjusted EBITDA margin +0.5% indicates a small but symbolic operating profit ₹6 crore is turning the corner after several losing quarters.

Meanwhile, Eternal (Zomato) reports Net Order Value (NOV) for its ‘Territory’ business, which includes dining, events and retail sales. The vertical index grew around 32% on a yearly basis but remains in the red with an EBITDA margin of -3.1% and a quarterly loss. ₹63 crore. Eternal’s broader revenue base— ₹189 crore in Q2 2026 compared to Swiggy’s ₹88 crore—reflecting a broader business mix but also heavier operational intensity.

It is important to note that Swiggy reports Gross Order Value (GOV), which is the total before discounts, while Zomato uses Net Order Value, which is the total after deducting partner commissions and discounts; This metric suggests that it better reflects the economics of the platform.

While Zomato’s higher revenue stems from its more diversified business mix spanning dining, events and retail, Swiggy’s top line reflects a narrower focus. (table)

Analysts say the recovery in dining out has been steady but still recovering. LKP Securities analyst Sandeep Abhange explains that this increase is partly at the macro level, thanks to the reopening of offices and premiumization of consumers, and partly behavioral, with loyalty programs encouraging repeat visits.

Pressure to eat out

Dining out has been stagnant for several quarters, largely because convenience and discounts in food delivery have undermined demand for dinner, especially on weekdays. The platforms’ heavy reliance on discounts has further squeezed both their own and the restaurants’ margins; This is a trend that has been exacerbated by the pandemic.

Based on management comments in recent earnings calls, both Zomato and Swiggy report that dine-in businesses contribute around 10-15% of their overall business.

Abhange adds that goods and services tax (GST) rationalization has provided a “measurable, albeit partial, tailwind”, especially for organized restaurants and fast trade categories. “The tax change has improved the economy at the partner level, but the main driver remains behavior – people are going out more.”

For restaurateurs, the improvement is visible but uneven. “We have seen savings of 1-2% depending on the restaurant category, especially for QSRs (quick service restaurants) that rely on processed foods, which were previously taxed at 12%,” said Pranav Rungta, vice-president of the National Restaurant Association of India (NRAI) and industry veteran, adding that GST cuts have improved input margins slightly.

However, platforms still foot most of the bill for discounts and payment routing; This has long been a sore point for NRAI, which has repeatedly flagged deep discounts for hurting restaurant margins and consumer prices.

Catering offers better margins than delivery, as there is no revenue sharing involved. “There are more benefits as the consumer is in direct contact with the point of sale. But aggregators are trying to get a piece of this business by offering booking services at huge discounts,” Rungta said.

NRAI advocates fair trading conditions and opposes arbitrary charges or fee increases imposed by aggregators. [platforms] “It reacted greatly,” he added.

But the bigger payoff is psychological; Sagar Daryani, co-founder of Wow!, says it helps restore price parity between dining in and ordering. Momo and the chairman of NRAI.

“The same customer who orders online every 45-60 days now returns to his favorite QSR every 30-35 days,” Daryani said.

behavior change

Dining out bills also increase average order value (AOV).

Eating out bills are usually ₹1,600 and ₹2,200 per guest, rising with cocktails ₹450-700 for delivery. Family packages are also available ₹750-900 on weekends, according to Zorawar Kalra, founder of Massive Restaurants.

Kalra believes dining out gives restaurants more leverage in everything from host negotiations to supplier contracts and even allows brands to slowly pull back on aggregator buying rates.

But not everyone is convinced this is a long-term comeback. Karan Taurani, senior vice president at Elara Capital, added that while channels still rely on heavy discounts, “online distribution continues to grow 18-20% annually, driven by habit and convenience,” customer numbers and frequency are yet to show consistent improvement, and discounts have increased consistently over the past two years, making the current dine-in traction largely incentive-driven rather than purely organic.

Despite strengthening underlying consumer sentiment, the recovery remains seasonal.

Swiggy and Zomato’s out-of-home Gross Order Value total clashes ₹3,588 crore in the first quarter of FY26, up 38.9% from the previous year; It’s a notable jump, but it’s showing signs of plateauing sequentially after festival peaks, according to data from Datum Intelligence. “Fatigue spending and reallocation of wallets towards home delivery and fast-paced business in metros are slowing momentum,” the firm notes.

For now, delivery volumes continue to increase, but dining out is quietly back on the table.