A percentage can improve while the amount it describes gets worse. For anyone assessing a growing business, that is not a contradiction. It is a reason to read the numerator and denominator together.
Swiggy’s October 22 shareholder letter reports Instamart’s adjusted EBITDA loss rising from ₹778 crore in the June quarter to ₹895 crore in September. EBITDA means earnings before interest, tax, depreciation and amortisation. Its loss margin improved from 9.8% to 9.7% of gross order value, or GOV. That denominator grew from ₹7,907 crore to ₹9,230 crore.
The Breakdown
Consider a purely hypothetical business, not a forecast for Swiggy. A loss of ₹10 on activity worth ₹100 is a 10% loss margin. If activity grows to ₹150 and the loss margin improves to 9%, the loss becomes ₹13.50. The percentage looks better; the amount is larger.
This arithmetic says nothing by itself about whether expansion is sensible. It establishes a narrower point: improving the ratio and reducing the absolute loss are different milestones. A growing denominator can help the first without delivering the second.
Not every margin moved together
GOV values goods mainly at maximum retail price before discounts, plus specified charges and taxes. Instamart’s contribution margin deteriorated from −0.2% to −1.0% of GOV, after delivery charges, platform-funded discounts, fulfilment and other variable costs are deducted from adjusted revenue. Adjusted EBITDA deducts specified lease rentals from segment results. Neither measure is cash flow or statutory net profit.
The distinction prevents a convenient but inaccurate reading: one improving margin does not establish that every layer of profitability has improved. Nor should an adjusted earnings loss be relabelled as cash burn. A cash-flow assessment requires its own evidence.
Why This Matters
For Indian brands deciding where to invest in distribution, the useful question is not simply whether a platform is getting bigger. It is whether customer demand will persist. Order growth alone cannot establish that durability; a single quarterly margin cannot establish it either.
For operators, a useful review keeps three questions separate. Is activity expanding? What remains after the costs assigned to each transaction? And is the absolute loss shrinking? These are complementary tests, not interchangeable labels for success.
The Crunch
Put the percentage beside the amount, then check what each measure includes. Growth can produce a better ratio before it reduces the loss a business reports.