Zomato’s share price declined 5.4% to an intra-day low of Rs 220.05 as the company’s net profit declined for the second straight quarter. It plummeted 78% year-on-year to Rs 39 crore in Q4FY25, compared to Rs 175 crore in Q4FY24. Eternal’s, which was formerly known as Zomato, net profit fell due to a rise in expenses.
However, its revenue from operations jumped sharply by 64% to Rs 5,833 crore in Q4FY25, compared with Rs 3,562 crore in the same quarter a year ago.
Nomura on Eternal
The international brokerage trimmed the target price slightly to Rs 280 from Rs 290 to factor in lower near-term profitability in the quick commerce business of Zoamto, after it raised $ 1 billion of QIP in November 2024. The company has a cash balance of Rs 18,800 crore as of the end of Q4FY25. However, the brokerage looked at the company not burning cash at the EBITDA level as a key positive. However, if the company’s lower profitability extends for a longer duration, it could be risky. The brokerage house has a target price of Rs 280 on Zomato and assumes a terminal growth rate of 6.5%.
Coming back to Eternal’s Q4 FY25, the food delivery giant’s expenses grew by 68% to Rs 6,104 crore in the fourth quarter of FY25 as against Rs 3,636 crore in Q4FY24.
“On the profitability front, consolidated Adjusted EBITDA declined 15 per cent YoY to Rs 165 crore in Q4 FY25, largely on account of the accelerated investments in expanding our quick commerce store network, which was partly offset by the improvement in food delivery Adjusted EBITDA margin to 5.2 per cent from 3.8 per cent a year ago,” said Eternal CFO Akshant Goyal.
Nuvama on Eternal
Nuvama, another key brokerage house, also highlighted the high competition in this space. They have maintained the Buy rating but cut the target price to Rs 300 per share from Rs 290 per share. Blinkit reported lower-than-expected losses despite an accelerated pace of dark store additions in Q4. Notably, contribution margin improved, even with dilution from newly opened dark stores. It added that, “with the store expansion cycle likely peaking, we are forecasting adjusted EBITDA losses shall decline from the next quarter.” The management commentary that “business may remain subdued for FY26. Losses may not go up from current levels; investment phase will continue and hence not expecting this business to become profitable,” also weighed on investors.
Motilal Oswal on Zomato
The domestic brokerage house Motilal Oswal maintained its ‘Buy’ call on the stock, with a target price of Rs 260 per equity share. It is still confident in the company’s market leadership in both quick commerce and food delivery. Plus, it is positive for the company’s long-term potential of Blinkit as a generational opportunity in retail, grocery, and e-commerce disruption.
Zomato’s Q3 result
Zomato reported a 57% YoY in net profit at Rs 59 crore in Q3FY25, down from Rs 138 crore in the same quarter a year ago. Its revenue from operations surged 64% YoY to Rs 5,404 crore in Q3FY25, up from Rs 3,288 crore in the same period of the financial year 2024-25.