Zepto’s financial performance in Q1 FY26 (April–June 2025) reflects a strategic pivot. While the company has seen explosive revenue growth in previous years, this specific quarter was defined by a deliberate throttling of expansion to improve unit economics and prepare for its upcoming IPO.
Here are the detailed insights into Zepto’s Q1 FY26 performance and its broader financial context:
Q1 FY26 Performance Highlights
- Losses & “Burn” Reduction: While full-year FY25 saw losses widen to ₹3,367 crore, Zepto entered FY26 with a focus on cutting its monthly cash burn. In Q1 FY26, reports indicated that Zepto’s growth plateaued relative to its competitors (Blinkit and Swiggy Instamart) as it prioritized unit economics over aggressive new-city launches.
- Market Share Shift: During this quarter, the overall quick-commerce market grew by approximately 20%. However, Zepto grew slower than its rivals:
- Blinkit (Zomato): Saw ~25% Gross Order Value (GOV) growth.
- Instamart (Swiggy): Saw ~22% GOV growth.
- Zepto: Faced a slight dip in market share (estimated at 29% earlier in the year) as it limited subsidies and marketing spend to narrow its losses.
- Infrastructure Strategy: Instead of rapid dark-store expansion, Zepto focused on densification—increasing the efficiency and order volume of its existing 500+ dark stores.
The Path to IPO (2026)
Zepto’s financial maneuvers in Q1 FY26 are a direct preparation for its public listing.
- Draft IPO Filing: In late 2025, Zepto filed its draft Red Herring Prospectus (DRHP) confidentially with SEBI. The company aims to raise between ₹10,000 crore and ₹11,000 crore (approx. $1.2 billion) in mid-2026.
- Domicile Shift: To facilitate the India listing, Zepto completed its “reverse flip,” moving its headquarters from Singapore back to India in January 2025.
- Valuation: Despite the reported losses, Zepto’s valuation soared to $5 billion following a $340 million fundraise in late 2024, with recent secondary rounds and pre-IPO talks pegging it near $7 billion.
Comparative Financial Snapshot (FY25 vs. FY24)
To understand why the Q1 FY26 loss reduction is significant, look at the scale of the previous fiscal year:
| Metric | FY24 (Actual) | FY25 (Actual) | Growth/Change |
| Total Sales | ₹4,224 Crore | ₹9,669 Crore | +129% |
| Net Loss | ₹1,215 Crore | ₹3,367 Crore | +177% |
| Operational Rev. | ~₹850-1,100 Cr | ~₹1,500-2,000 Cr | ~15-20% of GMV |
| Loss as % of Sales | 29% | 35% | Increased Burn |
Key Challenges Ahead
- Discount Fatigue: As Zepto pulls back on incentives to reach EBITDA breakeven (targeted for the end of FY26), it faces the risk of losing price-sensitive customers to Blinkit or BigBasket’s BB Now.
- Tier 2/3 Expansion: While metros are reaching “peak dark-store density,” the next phase of growth requires heavy investment in smaller cities, which have lower average order values (AOV).
- High Remuneration: Governance has come under the spotlight as the company prepares for its IPO; for instance, CFO Ramesh Bafna’s total remuneration for FY25 reached ₹6.85 crore, reflecting the high cost of top-tier talent in the race to go public.
