Zomato share price plunges for second day after profit shock

Zomato’s share price plunged around 10 per cent in early trade on Tuesday after the Indian-headquartered food delivery giant reported a sharp drop in net profit.

Zomato is a food delivery and restaurant discovery platform offering online ordering, table reservations, and customer reviews. Founded in India, it operates in 24 countries, connecting users with restaurants and quick commerce services.

On Monday, the company reported that its Q3 FY25 net profit fell 57 per cent to 590 million rupees ($6.8 million) for the quarter ended December 31, compared to 1.38 billion rupees in the same period last year.

Zomato is listed on India’s BSE and NSE. On Tuesday, its share price on the NSE opened at 223 rupees but dropped to 217 rupees during early trading. This follows Monday’s opening price of 252 rupees, marking a steep decline over two days.

This decline came despite a 64 per cent jump in third-quarter revenue to 54.05 billion rupees, up from 33 billion rupees a year ago.

The company’s quick commerce arm, Blinkit, remains a major drag on performance. Blinkit’s adjusted core loss widened to 1.03 billion rupees, compared to 890 million rupees a year earlier, even as order volumes surged.

Blinkit, which holds a 46 per cent share in India’s quick commerce market, faces stiff competition from Swiggy. Despite the challenges, Blinkit CEO Albinder Dhindsa expressed optimism during the company’s latest earnings report.

“To us, the biggest impact of intensifying competition has been the acceleration in customer awareness and adoption of quick commerce,” Dhindsa said. “We saw a similar trend in the early days of food delivery, where heightened competition drove greater investments in customer acquisition across the industry.”

Dhindsa added that the increased competition had temporarily stalled margin expansion but noted, “We have not seen any attrition of our core customers, which tells us that customers are continuing to choose Blinkit over other options.”