Zomato Ltd has witnessed a 17% decline in 2025, reflecting challenges in its quick commerce and food delivery segments. Factors like rising competition and increased operational costs are influencing its overall performance.

Q3 Performance Overview

The December quarter results did not meet market expectations due to higher investments in Blinkit and rising employee costs. Despite setbacks, the quick commerce segment achieved a remarkable 120% year-on-year (YoY) growth in gross order value (GOV). However, this growth relied heavily on marketing spending, resulting in an adjusted EBITDA margin of -1.3% of GOV.

Quick Commerce Updates

• Blinkit’s gross order value is projected to grow significantly in the coming years.
• Margins are expected to improve, but intense competition could pose profitability challenges.

Food Delivery Performance

• The food delivery segment showed a 17% YoY GOV growth, though it lagged behind expectations.
• Monthly Transacting Users (MTUs) slightly declined to 20.5 million in Q3.
• Adjusted EBITDA margins saw a modest improvement of 75 basis points (bps) quarter-on-quarter (QoQ) to 4.3% of GOV.

Blinkit Expansion Goals

Blinkit expanded aggressively by adding 216 new dark stores, totaling 1,007 stores by the end of December. The company has accelerated its target of reaching 2,000 stores by December 2025, a year ahead of its previous timeline.

Conclusion

Zomato continues to display growth potential in the quick commerce and food delivery domains, with significant GOV increases and expansion plans. However, challenges such as higher operational expenses and a competitive landscape remain key areas of concern, demanding close attention from stakeholders.