Zomato Q3 Results: A Mixed Bag for Shareholders

Zomato's Q3 results have been a mixed bag for shareholders. The company's revenue growth has been impressive, with a 58% increase in consolidated revenue from operations.

This growth is largely driven by the company's food delivery business, which saw a 71% increase in revenue from operations. The segment's revenue now accounts for 84% of Zomato's total revenue.

However, the company's losses have also increased, with a 4% rise in consolidated loss from operations. This is likely due to the company's investments in new businesses and expansion efforts.

Despite the losses, Zomato's stock price has remained relatively stable, suggesting that investors are optimistic about the company's long-term growth prospects.

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Zomato's Q3 results show a significant decline in net profit, with a 57.2% drop to ₹59 crore. This is a stark contrast to the same quarter last year, when the company earned a net profit of ₹138 crore.

The company's consolidated revenue from operations has increased, reaching ₹5,405 crore, a 64.4% jump from the ₹3,288 crore reported in the same quarter of the previous year.

Zomato's expenses have also risen, with total expenses shooting up to ₹5,533 crore, from ₹3,383 crore in the corresponding period of 2023-24.

Here are the key financial metrics from Zomato's Q3 results:

Zomato's revenue growth was a significant highlight in the company's financial performance. The festive season and the Cricket World Cup fueled a surge in food delivery orders, driving a 69% year-on-year growth in revenue from its core food delivery business.

This growth can be attributed to the increased demand for food delivery during these events. The company's quick commerce division, Blinkit, witnessed even more impressive growth, with revenue more than doubling compared to the previous year.

The combined effect of these factors led to a healthy 82% increase in the company's consolidated revenue, reaching ₹3,288 crore in the quarter. This is a testament to the company's ability to adapt to changing consumer behavior and capitalize on emerging trends.

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Zomato's Q3 net profit declined by a significant 57.2% to ₹59 crore. This is a substantial drop from the ₹138 crore net profit earned in the same quarter a year ago.

The company's consolidated revenue from operations increased to ₹5,405 crore, a notable rise from ₹3,288 crore in the corresponding quarter of the previous financial year.

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Zomato's target price has been revised by a global brokerage firm from Rs 320 to Rs 290, citing lower-profitability as a main risk in the near term.

The firm has maintained its 'Buy' rating on the stock, expecting Zomato to report a PAT margin of 3.5% in FY25E.

ICICI Direct also maintains its 'buy' rating, with a target price of Rs 310.

Zomato's shares have delivered a return of over 58% on the bourses on an annual basis.

The stock even turned a multibagger last year after a robust trajectory of its profits.

The brokerage firm's DCF-based valuation suggests a 13% upside from the current price, with a target price of Rs 270.

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Zomato shares plummeted 12.78% to INR 210.15 intraday on BSE after the company announced its third-quarter results for financial year 2024-25.

The stock price has tumbled around 20.81% in the last one month from the current market price, but it has maintained a handsome return of 66.64% over the last one year for its investors.

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Zomato's market capitalisation was at INR 2,10,618.90 Cr at 12:20 PM with nearly 23 Cr shares of the company trading hands by then.

However, the shares shed some loss to trade 8.6% below at INR 220.20 at 12:20 PM, which is still a significant drop from the previous day's trading.

Zomato's Q3 results have left investors with some concerns. The company's net profit declined by 57.2% to ₹59 crore, which is a significant drop from the ₹138 crore it earned in the same quarter a year ago.

The company's revenue from operations increased to ₹5,405 crore, but its total expenses shot up to ₹5,533 crore, resulting in a narrow margin. This is a concern for investors, as it indicates that Zomato is still investing heavily in marketing and expansion.

The quick commerce segment, which is a rapidly growing area, continues to operate at a loss. This is likely due to Zomato's heavy investment in marketing and expansion, which is necessary to stay competitive in this space.

Investors may be worried about the company's ability to turn a profit in this segment. However, it's worth noting that the segment is growing rapidly, which could potentially lead to increased revenue in the future.

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Zomato's future outlook is filled with challenges as it strives for sustainable profitability. Maintaining growth momentum will be crucial for the company to continue capturing market share and growing revenue.

Zomato's competitive landscape is a hurdle it needs to navigate. Optimising quick commerce is a key challenge, particularly with Blinkit, which needs to be made profitable without compromising its growth trajectory.

Investors may remain cautious due to Zomato's high valuation and lingering profitability concerns. This could impact the company's ability to attract and retain investors in the long run.

The future of Zomato will also depend on its ability to adapt to changing market conditions and consumer preferences.

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