Mon Jan 20 10:00:00 UTC 2025: ## Zomato Shares Plummet 7% After Disappointing Q3 Results

**Mumbai, January 20, 2025** – Zomato’s shares experienced a sharp 7% drop in the final hour of trading today following the release of its disappointing December quarter results. The company’s aggressive expansion of its quick-commerce platform, Blinkit, coupled with slower-than-expected growth in its food delivery business and rising employee costs, contributed to a significant decline in net profit.

Zomato’s net profit plunged 57% to ₹59 crore (approximately $7 million USD) compared to ₹138 crore in the same quarter last year. The primary culprit was Blinkit’s rapid expansion, which led to a ₹95 crore increase in losses for the quarter. While Blinkit’s revenue doubled, the cost of aggressively opening new stores to meet increased demand significantly impacted Zomato’s overall margins, reducing adjusted EBITDA by 14% or ₹45 crore. CEO Deepinder Goyal announced that they are accelerating their Blinkit expansion plan, aiming to reach 2,000 stores by December 2025, a year ahead of schedule.

Further contributing to the downturn was the sluggish growth in Zomato’s core food delivery business. Gross Order Value (GOV) increased by only 2% compared to the previous quarter, falling short of investor expectations. While the company maintains its long-term growth projections of over 20% annually, they acknowledged a slowdown in demand since November. Added expenses from the newly launched District app also impacted the bottom line, with the company expecting further losses from this venture over the next year.

Finally, a 21% increase in employee costs, attributed to new hires and competitive talent retention strategies, added further pressure to Zomato’s profitability. While CFO Akshant Goyal anticipates high employee costs for the next few quarters, the company aims to reduce this to 6-8% of adjusted revenue by FY26.

The overall underwhelming results, driven by increased investment in expansion and slower-than-anticipated growth, sent shockwaves through the market, leading to today’s significant share price decline.

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