May 8 (Reuters) - India's Swiggy on Friday reported a narrower fourth-quarter loss as its core food delivery business posted its strongest growth in nearly four years, driven by a sharp rise in orders and users as the firm focuses on affordability to sustain demand.

Food delivery is "defying scepticism around a sector slowdown, with meaningfully better margins than a year ago," CEO Sriharsha Majety said, citing how the segment has crossed 10 billion rupees ($105.84 million) in annual adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

Swiggy said affordability would be the biggest driver of growth in its food delivery business, helped by offerings such as its 99-Store and affordable restaurant marketplace Toing.

Rival Eternal, which reported results last month, also said curated offerings and meals priced under 250 rupees led to the growth of its food delivery business during the quarter. 

RISING ORDERS

Gross order value in food delivery, a key industry metric reflecting the total value of app orders and subscription fees, rose about 23% to 90.05 billion rupees. 

Quick commerce arm Instamart posted a 68.8% jump in gross order value to 78.81 billion rupees, with contribution margin-revenue remaining after variable costs- improving 65 basis points sequentially to negative 1.8%.

India's fast-growing quick-commerce sector has become an $11.5 billion market within five years, changing how Indians shop with apps allowing groceries and electronics to be home delivered within minutes.

The crowded space pits Swiggy against Eternal, global players like Amazon and Walmart-backed Flipkart and local rivals such as Reliance, and Zepto.

"By actively pivoting away from unprofitable low average order value (AOV) consumers and related orders, we have significantly changed the order mix by halving their share during this period," the company said. 

The company's consolidated loss narrowed by about a quarter to 8 billion rupees for the March quarter while revenue from operations rose nearly 4% for the same period.

($1 = 94.4800 Indian rupees)

(Reporting by Urvi Dugar and Devika Nair in Bengaluru; Writing by Abinaya V; Editing by Ronojoy Mazumdar)

By Urvi Dugar and Devika Madhusudhanan Nair