Zomato Q4 Earnings: Profit Dives 77.71% Despite 63.76% Revenue Surge; Blinkit Achieves Record Store Growth

Eternal Ltd, previously known as Zomato, has unveiled its earnings report for the fourth quarter of the fiscal year, revealing a profit of ₹39 crore. This figure marks a significant drop of 77.71% compared to ₹175 crore reported in the same quarter of the previous fiscal year (FY24). However, the company’s revenue from operations showed impressive growth, reaching ₹5,833 crore, which is a 63.76% increase from ₹3,562 crore in the fourth quarter of the last financial year. The EBITDA for the period stood at ₹72 crore, reflecting a decrease of 16.3% year-over-year.

Blinkit’s Expansion Strategy

Albinder Dhindsa, CEO of Blinkit, expressed that the rise in losses was anticipated and aligns with the company’s strategy to expand its store presence rapidly. He noted, “In Q4 FY25, we achieved a record addition of 294 net new stores, our highest ever in a single quarter. This expansion resulted in approximately 40% of our 1,301 stores being newly opened and underutilized, with a total of 216 stores added in Q3 FY25 and another 294 in Q4 FY25.” Additionally, he highlighted the addition of 1 million square feet of warehousing space to support this growth.

Key points from Dhindsa’s insights:
- Store Additions: 294 new stores opened in Q4 FY25.
- Utilization Rate: About 40% of the newly opened stores remain underutilized.
- Warehousing Expansion: Increased by 1 million sqft.

Insights on Customer Growth

Despite the losses, Dhindsa reported an increase in the contribution margin—rising from 3.8% to 3.9% of the Net Operational Value (NOV). He added that marketing investments were increased to boost customer acquisition, resulting in an uptick in average monthly transacting customers to 13.7 million in Q4 FY25, up from 10.6 million in Q3 FY25. He pointed out that margin growth, particularly in established areas of their network, could have been more substantial if competitive pressures had not intensified.

Food Delivery Growth:
- Gross Order Value (GOV) increased by 16% YoY.
- NOV rose by 14% YoY.
- Adjusted EBITDA margin improved to 4.4%.

Financial Overview of Eternal Ltd

Akshant Goyal, the CFO of Eternal, indicated that the NOV from the company’s B2C operations surged by 53% YoY (5% QoQ), reaching ₹17,440 crore in Q4 FY25. Excluding the effects of acquiring Paytm’s entertainment ticketing business, the like-for-like growth was 48% YoY. Meanwhile, Zomato’s B2B segment, Hyperpure, witnessed a remarkable 93% increase in revenue year-over-year.

Consolidated Revenue Highlights:
- Adjusted Revenue rose by 60% YoY to ₹6,188 crore.
- Adjusted EBITDA dropped by 15% YoY to ₹165 crore due to aggressive investments in the quick commerce sector.

Challenges in Food Delivery

Deepinder Goyal, CEO of Zomato, acknowledged that the growth in food delivery faced hurdles, including a lack of demand, a temporary shortage of delivery partners, and mounting competition from fast-paced quick commerce services. He noted that two significant factors contributed to the slowdown: the delisting of nearly 19,000 restaurants for hygiene issues or deceptive practices, and one less operational day in the quarter compared to the previous year.

Factors Impacting Growth:
- Restaurant Delistings: 19,000 restaurants removed for hygiene and compliance issues.
- Operational Days: One fewer day in Q4 FY25 compared to the leap year prior.

In summary, while Eternal Ltd’s financials reflect a complex landscape of growth and challenges, the company’s strategic expansion and customer acquisition efforts indicate a commitment to long-term success in the competitive food delivery and quick commerce markets.