Wed Jan 22 04:00:00 UTC 2025: ## Zomato’s Q3 Profit Plunges Amidst Heightened Competition

**MUMBAI, January 21, 2025** – Zomato, the Indian food delivery giant, reported a significant decline in net profit for the third quarter of fiscal year 2025 (Q3 FY25), sending its stock price tumbling. The company’s net profit fell 57.2% year-on-year to ₹59 crore (approximately $7.2 million USD), down from ₹138 crore in the same period last year. This downturn comes amidst intensified competition within the food delivery and quick commerce sectors.

While Zomato’s consolidated revenue from operations saw a substantial increase to ₹5,405 crore, compared to ₹3,288 crore in Q3 FY24, total expenses also soared to ₹5,533 crore from ₹3,383 crore. The company attributed the reduced profitability to heightened competition, particularly in the quick commerce sector where its Blinkit subsidiary operates.

In a letter to shareholders, Zomato acknowledged that the competitive landscape has paused margin expansion, although the company expects this to be temporary. They noted that increased competition has accelerated customer awareness and adoption of quick commerce, similar to the early days of the food delivery business. Despite this, Zomato reported no significant loss of core customers.

Nomura, a brokerage firm, described Zomato’s food delivery business performance in Q3 as “subpar,” with gross order value (GOV) growth lower than anticipated. They project 17-20% GOV growth for the food delivery business in FY2025 and FY2026, with a contribution margin of 8-9%.

Despite the competitive pressure, Blinkit has aggressively expanded its store count, surpassing its target of 2,000 stores by year-end, reaching 1,007 stores in just nine months of FY25. This rapid expansion is a direct response to the heightened competition in the quick commerce market.

The news impacted not only Zomato, whose stock price dropped as much as 13.3% on the National Stock Exchange (NSE) to ₹207.80, but also its competitor Swiggy, whose shares fell 11% on the NSE.

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