Food delivery major, Eternal’s (formerly Zomato) founder and CEO Deepinder Goyal on Thursday flagged a slowdown in the company’s food delivery business, attributing the trend to growing competition from quick commerce platforms and a dip in discretionary consumer spending. While announcing the firm’s January-March results, Goyal said that “growth does remain below our expectations for now,” noting that the rise in packaged food orders through services like Zepto Cafe, Swiggy Snacc, and Blinkit Bistro is “leading to a drop in the demand for food delivery from restaurants”.
Goyal also pointed to a shortage of delivery partners, many of whom are shifting to quick commerce jobs, and consumer spending cutbacks as factors weighing on growth.
Meanwhile, Eternal reported a consolidated net profit of Rs 39 crore during the January-March quarter, a steep 78% drop from Rs 175 crore in the same period last year and below Bloomberg’s estimate of Rs 42 crore. The figure also marks a sequential decline from Rs 59 crore in Q3 FY25.
Revenue from operations during the period rose 64% year-on-year to Rs 5,833 crore, slightly above Bloomberg’s estimate of Rs 5,824 crore. Ebitda came in at Rs 72 crore, down 16.3% from the previous year, and missing Bloomberg’s Rs 102 crore estimate. The drop was largely due to accelerated investments in expanding the company’s quick commerce network, notably Blinkit.
Gross order value (GOV) in the food delivery segment fell 1.3% quarter-on-quarter to Rs 9,778 crore in Q4, from Rs 9,913 crore in the preceding quarter. Year-on-year, GOV rose 16%, still missing the company’s own guidance of 20% growth. Zomato noted that the delisting of around 19,000 restaurants for undermining consumer trust, along with the quarter having one less day due to the leap year difference, shaved off around 2 percentage points from its GOV growth.
Even with those factors considered, the adjusted YoY growth of approximately 18% still fell short of expectations.
Total expenses surged to Rs 6,104 crore during the quarter, up from Rs 3,636 crore during the same period a year ago. For the full year, Zomato’s profit came in at Rs 527 crore, a 50% increase from Rs 351 crore in FY24, while revenue rose 67% to Rs 20,243 crore. However, annual expenses also climbed 63% to Rs 20,623 crore.
Zomato ended the March quarter with a cash balance of Rs 18,824 crore, a slight dip from Rs 19,235 crore in the previous quarter. Its food delivery business reported an adjusted revenue of Rs 2,409 crore in Q4, up 17.5% YoY but flat compared to Q3. The adjusted Ebitda margin for the segment held steady at 4.4 percent.