January 21, 2025
Zomato’s shares are expected to remain in focus on Tuesday following the food delivery company’s release of its financial results for the third quarter of fiscal year 2025. While the company saw a significant rise in revenue, it also reported a sharp 57% decline in its consolidated net profit for the December quarter.

In its earnings report, Zomato posted a net profit of Rs 59 crore for Q3 FY25, down from Rs 138 crore during the same period last year. This substantial drop in profits has raised questions among analysts, although the company attributed the decline to higher operating costs, including investments in new verticals and increased competition in the food delivery sector.
Revenue Growth
Despite the profit slump, Zomato showed impressive revenue growth. The company’s revenue from operations for Q3FY25 stood at Rs 5,405 crore, marking a 64% year-on-year increase compared to Rs 3,288 crore in Q3FY24. This surge in revenue was primarily driven by the continued expansion of its food delivery services, growing customer base, and increased demand for its subscription-based services like Zomato Gold.
Cost Pressures and Investments
Zomato’s operating costs have been under pressure as the company continues to scale up its business, including expanding its grocery and quick-commerce delivery services. While these ventures have contributed to the growth in revenue, they have also added to the company’s expenditure. The increase in marketing and promotional costs, as well as investments in technology and infrastructure, were also factors that impacted profitability.
Market Reaction and Outlook
The decline in net profit has put some pressure on Zomato’s stock, which has seen increased volatility in recent trading sessions. Market analysts have expressed mixed views on the company’s outlook, with some highlighting the strong revenue growth and future potential of Zomato’s expanding services. Others remain cautious about the challenges posed by rising costs and intense competition in the Indian food delivery market.
Looking ahead, Zomato is expected to continue investing heavily in its infrastructure and technology, with a particular focus on enhancing its customer experience and improving operational efficiency. The company’s focus on long-term growth strategies, including new product offerings and expansion into smaller cities, may provide future upside if executed effectively.
Zomato’s ability to balance growth with profitability will be key in the coming quarters as it faces mounting competition from rivals like Swiggy and international players in the food delivery space. As the company looks to build on its market leadership, investors will be closely monitoring its ability to navigate these challenges.
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