Zomato Q3 Results: PAT Declines 57% Despite 64% Revenue Growth; Shares Fall 7%
Q3 Financial Performance
Zomato India reported its financial results for the October to December quarter of FY 2025, showing a significant decline in profit after tax (PAT) despite robust revenue growth. The company's PAT for Q3 FY25 stood at ₹59 crore, a sharp decline of 57.25% year-on-year (YoY) from ₹138 crore in Q3 FY24. Quarter-on-quarter (QoQ), PAT dropped 66.5% from ₹176 crore in Q2 FY25. However, revenue surged 64.4% YoY to ₹5,405 crore from ₹3,288 crore in the corresponding quarter of FY24. EBITDA improved to ₹162 crore from ₹51 crore YoY, with the EBITDA margin rising to 3% from 1.6% in the same period last year.
Focus on Delivery Speed and New Initiatives
Zomato's CEO, Deepinder Goyal, highlighted the company's focus on reducing delivery times to boost demand. Zomato has launched Bistro, targeting the in-office market with quick access to snacks, meals, and beverages within 10-15 minutes. They have also introduced a quick delivery feature, enabling restaurants to offer under-15-minute deliveries with curated menus and a dedicated delivery fleet.
Aggressive Expansion Strategy
Zomato is aggressively investing in its quick commerce segment, accelerating growth investments initially planned for future quarters. The company aims to reach 2,000 stores by December 2025, a year ahead of its previous guidance. In Q3 FY25, Zomato added 216 net new stores, bringing its total store count to 1,007, along with 1.3 million square feet of warehousing space, accounting for over 30% of its warehousing network. While new warehouses take longer to ramp up, Zomato remains optimistic about long-term profitability.
Expected Losses in the Near Term
Zomato has acknowledged that near-term losses are likely due to its aggressive expansion strategy. The company anticipates that underutilized stores will impact profits in the next one or two quarters. However, it also projects strong Gross Order Value (GOV) growth exceeding 100% for FY25 and FY26 and expects to transition to significant profitability post this expansion phase.
Stock Performance
Zomato shares opened at ₹251.00 on January 20 but declined sharply after the release of the disappointing Q3 results. By market close, the stock was down 7.27%, ending at ₹230.70.
Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.
0 comments:
Post a Comment