Zomato Q3 Profit Slumps 57% YoY To INR 59 Cr

Foodtech major Zomato’s consolidated net profit slumped 57.2% to INR 59 Cr in the third quarter of the financial year 2024-25 (Q3 FY25) from INR 138 Cr in the year-ago quarter due to a slowdown in the food delivery segment and rising competition in quick commerce.

On a sequential basis, profit slumped 66% from INR 176 Cr.

However, operating revenue surged over 64% to INR 5,405 Cr during the quarter under review from INR 3,288 Cr in the same quarter last year. Sequentially, it rose 12.6% from INR 4,799 Cr.

Including other income of INR 252 Cr, total revenue stood at INR 5,657 Cr in Q3 FY25 as compared to INR 3,507 Cr in Q3 FY24.

Consolidated adjusted EBITDA (excluding ESOP cost) soared 120% year-on-year (YoY) to INR 285 Cr, primarily led by an improvement in food delivery adjusted EBITDA margin (as a percentage of GOV) to 4.5% compared to 3% a year ago.

However, on a quarter-on-quarter basis, consolidated adjusted EBITDA declined 14% largely due to accelerated investments in the expansion of its quick commerce dark store network, where losses surged by INR 95 Cr sequentially.

The Deepinder Goyal-led company saw healthy growth across all business verticals. The gross order value (GOV) of the food delivery business surged 17% to INR 9,913 Cr in Q3 FY25 from INR 8,486 Cr in the year-ago period. 

However, on a quarter-on-quarter basis, the growth was muted as GOV rose a mere 2% from INR 9,690 Cr. The company attributed this to the ongoing broad-based slowdown in demand, which started during the second half of November.

Meanwhile, quick commerce arm Blinkit’s GOV skyrocketed 120% to INR 7,798 Cr during the quarter under review from INR 3,542 Cr in Q3 FY24. Sequentially, it surged 27% from INR 6,132 Cr.

Amid Zomato’s continued push for its going-out business, the vertical registered the biggest 191% YoY and 35% QoQ surge at INR 2,495 Cr in the quarter ended December 31, 2024. It must be noted that this includes the impact of the acquisition of Paytm’s entertainment ticketing business. 

On a like-for-like basis (excluding the acquired business), the GOV of Zomato’s going-out grew 53% YoY and 52% QoQ.

Overall, the GOV of Zomato’s B2C business grew 57% YoY and 14% QoQ to INR 20,206 Cr in the reported quarter. 

Amid rising demand for 10-minute food delivery, Zomato recently launched ‘Bistro’ targeting a large in-office market wanting quick access to snacks, meals and beverages.

In a shareholders’ letter, Goyal said that the company has also launched a new feature enabling restaurants listed on Zomato to offer food delivery services in under 15 minutes by curating their menu items and providing a dedicated delivery fleet. This quick delivery feature is currently available in select locations and will be scaled over time.

Zooming Into Expenses

Delivery & Related Charges: Zomato spent INR 1,450 Cr under this head during the quarter under review, up 33% from INR 1,088 Cr in the December quarter last year. Sequentially, the spending under this bucket rose a little under 4% from INR 1,398 Cr.

Procurement Cost: Zomato’s expenses in this bracket surged nearly 92% to INR 1,500 Cr in Q3 FY25 from INR 782 Cr in the year-ago quarter. On a QoQ basis, the company saw an 11% rise in procurement costs from INR 1,354 Cr.

Employee Cost: Total employee benefit expenses grew 63% to INR 689 Cr in Q3 FY25 from INR 423 Cr in the corresponding quarter last year. This expense head also saw a 17% QoQ increase from INR 590 Cr.

Ad & Sales: The food delivery and quick commerce major continued to ramp up its investment for promoting its business during the December quarter, which led to a 39% increase in expenses in this bracket to INR 521 Cr in Q3 FY25 from INR 374 Cr in the year-ago period.

Shares of Zomato ended Monday’s trading session 3.14% lower at INR 240.95 apiece on the BSE.