Quick commerce company Zepto’s updated draft red herring prospectus (UDRHP) offers a glimpse into both the promise and challenges of India’s fastest-growing internet commerce segment. While the company has more than doubled its revenue and significantly expanded its user base, the filing also underscores the scale of capital required to compete in a market where growth continues to come at the expense of profitability.
Zepto’s revenue from operations surged 104% to ₹22,624 crore in FY26 from ₹11,110 crore a year earlier, while annual transacting users rose to 47.97 million from 38.38 million. The company processed more than 1.75 million orders a day through a network of 1,139 dark stores across India, highlighting the rapid adoption of quick commerce among urban consumers.
Yet, even as revenue doubled, losses widened to ₹5,905 crore from ₹4,700 crore in FY25. The company attributed the losses to continued investments in dark-store expansion, logistics infrastructure and customer acquisition in an increasingly competitive market dominated by rivals Blinkit and Instamart.
“Every new commerce enterprise goes through this. E-commerce went through it for the last two decades and now it’s the turn of quick commerce. When you are in an expansion stage, profit is far away,” said Harish Bijoor, business strategist. He added that expanding dark-store networks remains essential for long-term growth, arguing that grocery is merely the entry point for broader commerce opportunities.
Focus shifts to unit economics and scale
The filing suggests Zepto is betting that scale will eventually deliver profitability. One indication of improving operating efficiency is the company’s adjusted EBITDA per order, which improved to negative ₹78.75 in FY26 from negative ₹136.15 a year earlier. Adjusted EBITDA per order has steadily improved over the past three years, reflecting better order density and operational efficiencies across its network.
“The revenue growth is impressive, but the losses show Zepto is still far from profitability,” said Satish Meena, advisor at Datum Intelligence. “If you want to maintain a 35-40% market share and defend it against competitors, you have to keep spending. The market is becoming more competitive, Amazon is entering, and the growth rate of the overall market will eventually slow.”
The company points to improving unit economics as evidence that scale is beginning to work. Adjusted EBITDA loss per order improved to ₹78.75 in FY26 from ₹136.15 in FY25, suggesting each order is becoming less loss-making as order density improves. But analysts argue that better unit economics do not automatically translate into corporate profitability when expansion remains the priority.
Advertising emerges as a key monetisation driver
One of the most closely watched metrics in the filing is advertising revenue. The segment generated ₹1,636 crore in FY26, up from ₹651 crore a year earlier, reflecting growing interest from brands seeking to reach consumers on quick-commerce platforms.
However, Meena cautioned that investors may be overestimating advertising’s ability to transform the economics of the business. “Advertising is only one part of the monetisation engine. Brands have limits on how much they can spend. You cannot suddenly double ad spends indefinitely because brands also need to remain profitable on the channel,” he said.
Instead, he believes the next phase of monetisation will have to come from increasing average order values, improving fulfilment efficiency and extracting greater productivity from existing infrastructure.
IPO proceeds may not end capital needs
The IPO proceeds may provide Zepto with fresh firepower, but analysts believe they may not be enough for the long haul. “The ₹8,000-crore raise is not sufficient for its long-term ambitions. If competition remains intense and the company continues expanding at this pace, it will likely need to raise more capital later, potentially through a QIP,” Meena said.
That observation may be the most important takeaway from Zepto’s IPO filing. The company has demonstrated that quick commerce can scale rapidly in India. What remains unproven is whether scale alone can eventually deliver profits, or whether the sector’s leaders will need to keep returning to investors for capital as they battle for market share.