Strong revenue growth, wise investments, and difficulties with profitability across its many business lines are all factors in Zomato’s third-quarter results for FY25. Even though its sales climbed year over year (YoY), the company’s bottom line was negatively impacted by higher spending on growing its going-out and rapid commerce verticals. Here is a detailed analysis of Zomato’s Q3 FY25 performance highlights.
Revenue Surges, Profitability Dips
In Q3 FY25, Zomato’s profit after tax (PAT) dropped 57% year over year to ₹59 crore from ₹138 crore in the same period the previous year. In Q2 of FY25, the PAT also decreased sequentially from ₹176 crore.
The company’s operating revenue increased 64% year over year to ₹5,404 crore from ₹3,288 crore the previous year, despite the decline in profitability. Comparatively speaking, this is an increase from ₹4,799 crore in Q2 FY25.
Due to higher investments across all verticals, total expenses climbed dramatically to ₹5,533 crore from ₹3,383 crore in Q3 FY24 and ₹4,783 crore in Q2 FY25.
Food Delivery: Marginal Gains Amid Slowdown
The gross order value (GOV) of Zomato’s primary food delivery business increased moderately, from ₹8,486 crore in Q3 FY24 to ₹9,913 crore in the current quarter. However, sequentially, the growth was only modest, up from ₹9,690 crore in Q2 FY25, which was indicative of a decrease in demand that had been present since mid-November.
From 20.7 million in the prior quarter to 20.5 million in the current quarter, the average monthly transacting customers (MTCs) experienced a minor decline. However, platform fee modifications and expense reductions drove a sequential improvement in adjusted EBITDA margins, which went from 3.5% to 4.3%. CEO Rakesh Ranjan was upbeat about long-term margin gains and a 20% year-over-year growth goal for the government.
Blinkit: Quick Commerce Growth, Rising Losses
Zomato’s quick commerce arm Blinkit showed impressive revenue growth, up 117% YoY to ₹1,399 crore in Q3 FY25 from ₹644 crore in Q3 FY24. Sequentially, revenue grew from ₹1,156 crore in Q2 FY25. Blinkit’s GOV surged to ₹7,798 crore from ₹3,542 crore a year ago, with an average order value (AOV) of ₹707, compared to ₹660 in the previous quarter.
However, Blinkit’s adjusted EBITDA losses widened significantly to ₹103 crore from ₹8 crore in Q2 FY25. Co-founder and group CEO Deepinder Goyal attributed the losses to accelerated investments in expanding Blinkit’s store network, which grew from 451 stores in Q3 FY24 to 1,007 stores in the current quarter.
“We expect to reach our target of 2,000 stores by December 2025, a year ahead of our original timeline,” Goyal stated.
Going-Out Vertical: District Gains Momentum
Zomato’s going-out business, including its live events and ticketing app District, saw a massive 254% YoY revenue jump to ₹259 crore in Q3 FY25, compared to ₹73 crore in Q3 FY24. Sequentially, revenue grew from ₹154 crore in the previous quarter.
The launch of District in November 2024, following Zomato’s acquisition of Paytm Insider, has driven rapid growth. The app has crossed 6.5 million downloads, while GOV for the vertical rose to ₹2,495 crore from ₹858 crore a year ago. Zomato expects the business to grow at over 40% YoY in the coming years, though it anticipates short-term losses due to upfront investments.
Hyperpure: B2B Supplies Continue to Scale
Hyperpure, Zomato’s B2B supplies vertical, reported robust revenue growth of 95% YoY to ₹1,671 crore in Q3 FY25, up from ₹859 crore a year ago. Sequential revenue growth also remained strong, rising from ₹1,473 crore in Q2 FY25. This vertical’s performance underscores Zomato’s growing strength in serving restaurants with high-quality supplies.
Cash Reserves Strengthen
Zomato’s cash reserves swelled to ₹19,235 crore at the end of Q3 FY25, largely due to its recent ₹8,446 crore fundraise through a qualified institutional placement (QIP). This robust financial position provides a cushion for the company’s aggressive expansion and investment plans.
Credits: Money Control
Outlook: Balancing Growth with Profitability
Zomato’s Q3 FY25 performance underscores its dual focus on revenue growth and strategic expansion. While the company has made strides in its food delivery and quick commerce businesses, profitability remains a concern, especially with rising expenses in Blinkit and District.
The management is nevertheless hopeful about all verticals’ long-term prospects. In the upcoming years, it is anticipated that investments in market share expansion, customer experience, and technology would pay off handsomely.
In India’s dynamic foodtech and commerce ecosystem, Zomato’s ability to strike a balance between growth and profitability would be essential to maintaining its competitive edge. The company has solid foundations and a varied portfolio.
