Zomato Delisted 19,000 Restaurants In Q4 FY25

Eternal’s food delivery vertical Zomato delisted 19,000 restaurants from the platform in Q4 FY25. 

In its shareholders letter, the company, which reported a stagnant quarterly performance for the food delivery vertical, cited three key reasons for delisting the restaurants from the platform: 

— Concerns over hygiene standards that were brought to light due to “severe” customer escalations.

— Mimicking more established brands to mislead customers.

—  Operating multiple identical menu listings to hog more listing impressions. 

“As one of the leading food delivery platforms, we think it is critical to weed out bad actors which erode trust in the category,” Eternal CEO Deepinder Goyal said.

The company said that the delisting will impact order volumes, but it was the right thing to do for the long term.

Zomato reported an adjusted revenue of INR 2,409 Cr in Q4 FY25, marking a 17.5% year-on-year increase and a slight dip from the INR 2,413 Cr in the preceding December quarter.

Average monthly transacting users for Zomato stood at 20.9 Mn, up slightly from 20.5 Mn in the past quarter and 19 Mn in the year-ago quarter.

The delistings of the restaurants brought down Zomato’s net order value by 2 percentage points. 

Its gross order value (GMV) grew a mere 16% YoY to INR 9,778 Cr from INR 8,439 Cr in the year-ago period. 

Adding to this, Zomato announced that it is shutting down ‘Quick’ and Zomato Everyday. Goyal said that the company does not see a path to profitability for the offerings without compromising on customer experience.

The CEO also highlighted that the growth for the food delivery vertical remained below the company’s expectations. He attributed the slowdown to three reasons: 

– Sluggish demand environment, especially in discretionary spending

– Shortage of delivery partners because of rise in their demand driven by rapid expansion in quick commerce 

– Competition from quick delivery of packaged food from quick commerce leading to drop in demand for food delivery from restaurants

However, he said that the long-term view for the segment remains bullish. “Overall, however, we don’t see any long-term structural reason for this slowdown, as the fundamentals – low penetration of restaurant food and increasing urbanisation and per capita income in India – remain unchanged,” the CEO said.

Goyal also said that he is currently heading the food delivery business after Rakesh Ranjan completed his two-year tenure as the CEO of the vertical. 

“He (Ranjan) has been with Eternal for 7+ years and during his tenure as CEO of the food delivery business, Zomato gained meaningful market share and margin expansion. As of now, I am back in the driver’s seat until we formalise the next set of leaders to take over for the next two years,” he added.

Overall, Eternal’s consolidated net profit declined 77.8% to INR 39 Cr in Q4 FY25 from INR 175 Cr in the year-ago period due to the cash burn in its quick commerce vertical Blinkit.