Indian food delivery platform Zomato on Tuesday reported a net profit of Rs 176 crore ($21 million) for the September quarter (Q2 FY 2025)—4.8 times the Rs 36 crore reported a year ago but 30% down from the Rs 253 crore reported in the June quarter.
The Q2 net profit also fell short of the Rs 270 crore that LSEG analysts were expecting, according to data cited by Reuters.
Revenue from operations of the Gurugram-based company increased 69% to Rs 4,799 crore ($570 million) in the three-month period, aided by higher food orders.
Broken down by segment, food delivery clocked a 21% YoY adjusted revenue growth to Rs 2,340 crore ($278 million) while the gross order value (GOV) also rose 21% year-on-year to Rs 9,690 crore.
The quick commerce arm, Blinkit, meanwhile, experienced a 129% YoY growth in adjusted revenues, touching Rs 1,156 crore. GOV in this segment rose 122% YoY to Rs 6,132 crore.
Zomato’s adjusted revenue by segment
Zomato’s GOV by segment
Unlike the food delivery business, which posted an adjusted EBITDA of Rs 341 crore in Q2 FY2025, the quick commerce business has yet to turn adjusted EBITDA positive (see table below).
The company’s overall adjusted EBITDA in the September quarter stood at Rs 330 crore, nearly flat compared with Rs 299 crore in the preceding quarter.
Fundraising through QIP
Zomato’s board also approved a proposal to raise Rs 8,500 crore (around $1 billion) via a qualified institutional placement (QIP) of equity shares, according to its filing to the stock exchanges on Tuesday.
The company said the fundraising is meant to strengthen its balance sheet. Over the last three years, the company’s cash balance reduced from around Rs 14,400 crore to around Rs 10, 800 crore, mainly on account of “funding losses at its quick commerce business, some equity investments and acquisitions”.
Cash balance reduced by Rs 1,726 crore in Q2 FY2025, compared with the previous quarter. This was on account of the Rs 2,014-crore ($244 million) acquisition of Paytm’s entertainment ticketing business in August
“We believe that capital by itself does not give anyone the right to win (and that service quality is the key determinant of success), but we want to ensure that we are on a level playing field with our competitors, who continue to raise additional capital,” said CEO Deepinder Goyal.
Store additions at Blinkit
Zomato’s margins were capped in the latest financial quarter due to a rapid expansion in the number of distribution stores at Blinkit to withstand the stiff competition from IPO-bound rival Swiggy and unicorn Zepto.
There were 152 stores by Blinkit added in Q2 FY2025, compared with 28 in the year-ago quarter. The company also added seven new warehouses in the period.
“While most of our stores today are profitable with expanding margins, we are not seeing margin expansion at aggregate level at this moment because of the investments we are making towards scaling our infrastructure. This includes not just the stores that we are adding, but also the back-end large warehouses. Since new stores and warehouses take a few months to ramp up, they end up being margin dilutive in the short term,” said Goyal.
The company said in the same filing that it acquired a minority stake in Byond Nxt Smart Home Pvt Limited, a startup focused on smart kitchen appliances, for a mere Rs 6,000 to “support the growth of the business”.
The move is part of Zomato’s interest in supporting technologies within the broader food ecosystem. The company, which was incorporated in August this year, is in the process of raising additional funds, according to the filing.
Zomato’s rival Zepto, which last garnered $340 million in August in a funding round led by General Catalyst and participation from Dragon Fund (Mars Growth Capital) and Epiq Capital, is currently on the road to raising another $100 million—its third funding in six months.
Meanwhile, Swiggy, backed by investors such as Naspers, Norwest Venture Partners, Tencent, and SoftBank, last secured $700 million in funding, which pegged the valuation of the company at $10.7 billion. Swiggy also filed papers in September for an initial public offering, which Reuters reported would be worth $1.25 billion, as the food delivery firm looks to tap a booming stock market.
Currently, both Zomato and Swiggy are locked in an intense competition as they vie for a higher share in the mainstay food-delivery market, which is still in its infancy, say experts. Going forward, the sector is expected to scale with India’s growing middle class and rise in disposable incomes.
