Zomato Share Price Drops Over 9% Following Weak Q3 Results

Zomato Share Price Movement Post Q3 Results

Zomato's share price experienced a sharp decline of over 9% during Tuesday’s trading session following the release of its  Q3 results. The stock opened at ₹223.10 on the BSE, reached an intraday high of ₹227.05, and hit a low of ₹219.

The company reported a 57.2% year-on-year decline in consolidated net profit for Q3 FY25, amounting to ₹59 crore compared to ₹138 crore in the same quarter last year. The decrease in profitability is attributed to increased costs related to the rapid expansion of its quick-commerce service, Blinkit.

Revenue and Expense Breakdown

Zomato's consolidated revenue from operations rose to ₹5,405 crore, a substantial increase from ₹3,288 crore in Q3 FY24. This significant revenue growth should instil optimism in investors and stakeholders. However, total expenses surged to ₹5,533 crore, up from ₹3,383 crore in the same period of the previous fiscal year, reflecting the strain on the company's margins.

Food Delivery Performance

Food delivery revenue showed a 2% sequential increase and a 17% year-on-year rise despite the company noting a broader "demand slowdown". The revenue uptick underscores Zomato's efforts to counter market challenges,cost optimization.

Looking Ahead

While Zomato continues to see revenue growth, the sharp rise in expenses and declining profitability indicate potential  challenges in scaling operations amid a fluctuating demand environment. Investors and stakeholders will likely closely monitor the company's strategy to improve operational efficiency and profitability in the coming quarters.