Zomato Q3 Results 2024-2025
Zomato has unveiled its financial performance for the third quarter of the fiscal year 2024-25 (Q3 FY25) on January 20, 2025. The Zomato Q3 results reveal a mixed bag of significant revenue growth alongside a notable decline in net profit. Here’s an in-depth analysis of the financial highlights, market reaction, and prospects for Zomato and its shares.
Financial Summary
Net Profit
- Zomato’s consolidated net profit for Q3 FY25 dropped sharply by 57.2% to ₹59 crore, compared to ₹138 crore in the same quarter last year. This represents a sequential decline of 66% from the previous quarter’s profit of ₹176 crore.
Revenue Growth
- Despite the dip in profits, Zomato achieved a remarkable 64.4% growth in revenue, reaching ₹5,405 crore compared to ₹3,288 crore in Q3 FY24. Sequentially, this marks a 13% increase from the previous quarter.
Expense Analysis
Total Expenses
- Total expenses surged by 63.6%, amounting to ₹5,533 crore, up from ₹3,383 crore in the same period last year. A significant portion of these expenses stemmed from:
- Stock-in-trade purchases, which nearly doubled to ₹1,510 crore.
Blinkit Performance
- Zomato’s quick commerce platform, Blinkit, was a standout performer with its revenue soaring by 117.2% to ₹1,399 crore, compared to ₹644 crore a year earlier. Losses in this segment narrowed considerably from ₹56 crore to ₹30 crore, showcasing improved operational efficiency.
Market Reaction
- Following the announcement of its Q3 results, Zomato’s shares dropped by over 7%, closing at approximately ₹240.95 on the Bombay Stock Exchange (BSE). The decline was driven by concerns about the sharp drop in net profit and rising operational costs.
Future Outlook
- Zomato is focusing on expansion and strategic growth to strengthen its position in the highly competitive quick commerce sector.
Key initiatives include:
- Expanding Blinkit’s footprint by increasing the number of stores to 2,000 by December 2025.
- Addressing rising costs while capitalizing on robust demand for its services.
Future Predictions for Zomato Shares
- Zomato’s share price predictions for 2025 reflect diverse expectations, influenced by recent financial performance and broader market dynamics.
Current Market Overview
- Post-Q3 results, Zomato’s stock closed at around ₹240.95, reflecting market concerns over declining profits. Analysts suggest that the share price could fluctuate based on the company’s ability to execute its growth strategies effectively.
Price Target Predictions
- CLSA: Sets a target price of ₹400, citing strong growth prospects in the quick commerce sector and a projected revenue CAGR of 51% from FY24 to FY27. They view the recent price correction as a buying opportunity.
- Jefferies: Downgraded Zomato to “Hold” with a reduced target price of ₹275, expressing concerns over rising competition and anticipating stock consolidation in the near term.
- Bernstein: Maintains an “Outperform” rating with a target price of ₹335, emphasizing Zomato’s leadership in food delivery and quick commerce, along with strong user acquisition trends.
General Predictions
- Forecasts suggest Zomato’s share price could range between ₹245.54 and ₹336.85 throughout 2025, with gradual increases expected as the company navigates market challenges and implements its expansion strategies.
Analyst Sentiment
Out of 28 analysts covering Zomato:
- 24 analysts recommend a “Buy” rating.
- 3 analysts suggest “Sell.”
This overall optimism reflects confidence in Zomato’s long-term growth, despite short-term setbacks.
FAQs
What are the highlights of Zomato’s Q3 FY25 financial results?
Zomato reported a 64.4% revenue growth year-over-year but saw a 57.2% drop in net profit. Blinkit’s revenue surged by 117.2%, but operating expenses rose significantly.
How much revenue growth did Zomato report in Q3 FY25?
Zomato reported a 64.4% increase in revenue from operations, reaching ₹5,405 crore compared to ₹3,288 crore in Q3 FY24.
What caused the decline in Zomato’s net profit in Q3 FY25?
Increased operational expenses, especially in stock-in-trade purchases, led to a 57.2% drop in net profit to ₹59 crore.
How did Blinkit perform in Q3 FY25?
Blinkit’s revenue grew by 117.2%, reaching ₹1,399 crore. Losses narrowed from ₹56 crore to ₹30 crore.
What was the market reaction to Zomato’s Q3 FY25 results?
Zomato’s shares fell by over 7%, closing at ₹240.95 on the BSE, reflecting investor concerns over profit declines.
What are analysts predicting for Zomato’s share price in 2025?
Analysts predict a range of ₹245 to ₹400, with growth potential in quick commerce but caution due to rising costs and competition.
What are Zomato’s future growth strategies?
Zomato plans to expand Blinkit stores to 2,000 by December 2025 and focus on efficiency to manage rising costs.
How are operational costs impacting Zomato’s financial performance?
Operational expenses surged by 63.6%, reaching ₹5,533 crore, significantly impacting net profit.
What is the significance of Zomato’s expansion in the quick commerce sector?
Quick commerce, led by Blinkit, is a major growth driver, contributing significantly to revenue despite increased competition.
What do analysts recommend regarding Zomato shares after Q3 FY25 results?
Most analysts recommend a “Buy,” citing long-term growth potential, though some advise caution due to near-term challenges.
Final Conclusion
In Conclusion, Zomato’s Q3 results, and FY25 performance highlight both opportunities and challenges. While revenue growth remains robust, declining profits and rising expenses have raised concerns among investors.
The company’s strategic focus on expanding Blinkit and optimizing costs offers a promising path forward. Investors should consider Zomato’s long-term potential, balancing short-term volatility with its growth trajectory in food delivery and quick commerce markets.
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