Despite a 57% decline in net profit for the December 2024 quarter, Zomato experienced a 64% increase in revenue. This was largely due to investments made in expanding its food delivery business and quick commerce store network. However, the quick commerce segment recorded an EBIT loss of Rs 30 crore, potentially affecting the company's profitability in the coming quarters. Zomato is still on track to reach its goal of 2,000 stores by December 2025, much earlier than its previous guidance of December 2026.
Zomato's Q3 Financials: Strong Revenue Growth Amidst Profitability Challenges
Background:
Zomato, the Indian food delivery giant, has recently released its financial results for the third quarter of fiscal year 2024-25 (Q3 FY25). The results showcase a mix of strong revenue growth and ongoing profitability challenges.
Key Financials:
Expansion and Challenges:
Zomato's growth has been fueled by its aggressive expansion strategy. The company has been investing heavily in expanding its food delivery business and establishing a network of quick commerce stores. This expansion has driven revenue growth but also increased expenses.
The quick commerce segment, which offers grocery and other essential items for rapid delivery, continues to be a loss-making venture for Zomato. In Q3 FY25, the segment recorded an EBIT loss of Rs. 30 crore (approx. $4 million). This loss is expected to continue in the coming quarters, potentially weighing on the company's overall profitability.
Outlook:
Despite the profitability challenges, Zomato remains optimistic about its future prospects. The company plans to continue its expansion efforts and is targeting a network of 2,000 quick commerce stores by December 2025, ahead of its previous guidance of December 2026.
Top 5 FAQs and Answers:
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