Synopsis
Zomato has reported a significant decline in net profit for Q3 FY25, while operational revenue saw a notable increase. The company aims for rapid expansion in its quick commerce segment despite short-term losses.Key Takeaways
- Zomato's net profit fell by 57% in Q3 FY25.
- Operational revenue increased by 64% year-on-year.
- Quick commerce revenue surged by 117%.
- Plans to open 1,000 new stores by December 2025.
- Stock price dropped by 7% during trading.
New Delhi, Jan 20 (NationPress) - The prominent online food delivery service, Zomato, disclosed a substantial 57% decrease in its net profit year-on-year, amounting to ₹59 crore for the third quarter (Q3) of FY25, down from ₹176 crore in the corresponding quarter of the previous fiscal year.
On a brighter note, the company’s operational revenue surged by 64%, reaching ₹5,404 crore in Q3, compared to ₹3,288 crore during the same period last year.
In Q2 of FY25, the revenue stood at ₹4,799 crore.
Zomato also experienced a 64% rise in expenses, totaling ₹5,533 crore for the third quarter. The quick commerce division witnessed a remarkable 117% increase in revenue.
This segment generated ₹1,399 crore in Q3, contrasting with ₹644 crore from the same timeframe last year.
“As we enhance our store expansion efforts, our networks may need to manage a higher number of under-utilized stores, which could adversely affect short-term profits for the upcoming one or two quarters,” stated Zomato CFO Akshant Goyal.
Despite this, such investments are expected to lead to substantial growth in gross operational value (GOV), maintaining a level significantly above 100% for FY25 and FY26, he added.
The firm also updated shareholders on its plans, revealing intentions to establish 1,000 new Blinkit stores by December 2025.
On Monday, Zomato's shares fell by nearly 7% during the trading session, though they initially traded positively before the sharp decline.
Deepinder Goyal, Founder and CEO, remarked that the losses in the quick commerce sector this quarter stem from accelerating growth investments that were meant to be made gradually over the next few quarters.
“Currently, it appears we will achieve our goal of 2,000 stores by December 2025, much sooner than our earlier estimate of December 2026,” he highlighted.
The quick commerce GOV experienced a 120% year-on-year growth (and 27% quarter-on-quarter).
“We remain optimistic about the quality of the business we are developing amidst these investments – evidenced by the strong margin profile of the more established sectors of the business, along with sustained high customer retention,” stated Albinder Dhindsa, Founder and CEO of Blinkit.
