Zomato Q3 Results 2025: Navigating Growth Amidst Challenges

In the third quarter of the fiscal year 2025, Zomato, India's leading food delivery platform, reported its financial outcomes, shedding light on the company's performance and strategic direction. The Zomato Q3 results revealed a complex interplay between robust revenue growth and declining net profits, underscoring the challenges and opportunities in the rapidly evolving food delivery and quick commerce sectors.

Revenue Surge in Zomato Q3 Results

The Zomato Q3 results showcased a significant increase in revenue, reaching ₹5,405 crore, a 64% year-on-year growth compared to ₹3,288 crore in the same quarter of the previous year. This impressive rise was primarily driven by the festive season, with celebrations like Deepavali and Christmas contributing to higher order volumes. The Gross Order Value (GOV) of Zomato's B2C businesses grew by 57% year-on-year, amounting to ₹20,206 crore in Q3FY25.

Decline in Net Profit

Despite the substantial revenue growth, the Zomato Q3 results indicated a 57% decline in net profit, falling to ₹59 crore from ₹138 crore in the corresponding quarter of the previous year. This downturn is attributed to increased competition and elevated spending on expanding fulfilment centres for its quick commerce platform, Blinkit. The heightened competitive landscape, particularly from rivals like Swiggy's Instamart, Zepto, Flipkart, and BigBasket, has led to a pause in margin expansion for Blinkit.

Blinkit's Performance and Challenges

Blinkit, Zomato's quick commerce segment, reported a revenue surge of over 117% year-on-year, reaching ₹1,399 crore in the third quarter. However, the segment's adjusted core loss widened to ₹103 crore from last year's loss of ₹89 crore, even as orders surged. The increased losses are linked to intensified competition and substantial investments in expanding the number of 'dark stores' and distribution warehouses to enhance delivery capabilities.

Food Delivery Segment Performance

The food delivery segment, a key revenue driver for Zomato, experienced a 21.5% increase in revenue, amounting to ₹2,072 crore in the October to December quarter. Despite this growth, the company noted a broad-based slowdown in demand starting from the second half of November, which impacted the overall performance of the segment.

Strategic Investments and Future Outlook

In response to the competitive pressures and to capture a larger market share, Zomato plans to launch 1,000 new Blinkit stores by December 2025. While these investments are expected to impact near-term profits, the company anticipates that, post-expansion, the business will transition from being loss-making to becoming meaningfully profitable as a larger portion of the business comprises mature stores. Zomato's Chief Financial Officer, Akshant Goyal, highlighted that the current investments would likely result in Gross Order Value (GOV) growth remaining meaningfully above 100% for FY25 and FY26.

Market Reaction

Following the announcement of the Zomato Q3 results, the company's shares experienced a decline. The stock closed 3.14% lower at ₹240.95 after Monday's trading session, reflecting investor concerns over the declining net profit and the challenges faced in the quick commerce segment.

Conclusion

The Zomato Q3 results for 2025 present a narrative of a company in transition, striving to balance growth and profitability amidst a competitive and dynamic market environment. While the substantial revenue growth underscores the company's strong market presence and the potential of its diversified business model, the decline in net profit highlights the challenges inherent in rapid expansion and stiff competition. Zomato's strategic investments, particularly in expanding Blinkit's infrastructure, indicate a forward-looking approach aimed at long-term gains, even at the expense of short-term profitability. As the company navigates these challenges, its ability to adapt and execute its strategic vision will be crucial in determining its future trajectory in the Indian food delivery and quick commerce sectors.