Zomato's profit jumps 389% to Rs 176 crore in Q2FY25, revenue stood at Rs 4,799 crore

Deepinder Goyal-led food delivery giant Zomato reported a staggering 388.9% increase in profit for the second quarter of FY25, posting Rs 176 crore, a sharp rise from Rs 36 crore in the same period last year.

However, profits declined by 30% when compared to the first quarter of FY25, where profits stood at Rs 253 crore.

Despite this dip, the company's overall financial performance remained robust, driven by strong revenue growth across its business verticals.

Zomato also achieved a notable turnaround in its EBITDA, reporting Rs 226 crore in Q2FY25 compared to an EBITDA loss of Rs 47 crore.

Revenue growth across business segments

Zomato’s revenue from operations grew by 68.5% year-on-year (YoY), amounting to Rs 4,799 crore in Q2 FY25, up from Rs 2,848 crore in Q2 FY24.

The company’s key revenue contributors include its core food delivery business, quick commerce (Blinkit), and the B2B Hyperpure segment.

Food delivery remains the largest revenue stream, accounting for 42% of total revenue, with an increase in gross order value (GOV) of 21% YoY.

Quick commerce arm Blinkit recorded a 122% jump in GOV to Rs 6,132 crore, while Hyperpure saw its revenue grow by 98% YoY to Rs 1,473 crore, providing a strong boost to Zomato’s overall earnings.

The GOV refers to the value of all delivery orders placed online on the platform, including taxes, customer delivery charges and all discounts.It does not include the tips offered to delivery partners.

Increasing expenses and impact on margins

While revenue growth has been impressive, Zomato’s expanding operations have increased costs, particularly in delivery expenses and infrastructure investments.

Total expenses surged to Rs 4,783 crore in Q2 FY25, up from Rs 3,039 crore in the same quarter last year. Delivery charges increased by 97.9% to Rs 1,334 crore, driven by higher order volumes.

Employee benefits, marketing, and warehouse expansion also contributed to the rise in overall expenditure.

Akshant Goyal, CFO of Zomato, acknowledged that the addition of new Blinkit stores and warehouses has put pressure on margins. "While most of our stores today are profitable, the investments in scaling our infrastructure, including new stores and warehouses, have been margin dilutive in the short term," Goyal said.

The company added 152 Blinkit stores and seven warehouses during Q2 FY25, which are expected to take several months to reach full profitability.

Fundraising plans and strategic goals

Zomato’s board has approved a fundraising initiative worth Rs 8,500 crore through a qualified institutional placement (QIP) of equity shares.

This move aligns with the company's aim to strengthen its balance sheet and maintain a competitive position in the rapidly evolving food delivery and quick commerce markets.

CEO Deepinder Goyal emphasized that while the business is now generating cash, raising additional capital is necessary due to the competitive landscape.

“We believe that service quality is key to success, but we also need to ensure we are on a level playing field with competitors who continue to raise additional capital,” Goyal noted.