Zomato's Q4 FY25 Financial Report: A Deep Dive
Zomato's Q4 Financial Results: A 77.71% Decrease in Profits, Yet a 63.76% Increase in Revenues; Blinkit Sets a New Record with Increased Store Counts.
Zomato, now rebranded as Eternal, revealed some juicy details about its Q4 FY25 financial performance. Let's take a closer look at what happened.
Profit Plunge
Eternal's consolidated net profit took a nosedive, plummeting by around 78% year-on-year (YoY) to an estimated ₹39 crore[1][2][3]. This steep drop was primarily due to an increase in expenses, which soared by 68% YoY to ₹6,104 crore[1][3].
Revenue Growth Galore
Despite the profit plunge, Eternal managed to rake in a substantial 64% increase in revenue from operations, amounting to ₹5,833 crore in Q4 FY25 as opposed to ₹3,562 crore in Q4 FY24[2][4]. Total income also climbed more than 60% to ₹6,201 crore[4].
Business Segments Analysis
Food Delivery Segment
The core food delivery segment held steady while delivering a Gross Order Value (GOV) of ₹8,439 crore, marking a 6% increase sequentially[1]. Adjusted EBITDA margin also improved to 5.7%, largely due to higher average order values and more efficient logistics[1].
Blinkit Performance
Blinkit, the quick commerce division, enjoyed strong growth with revenue skyrocketing by 122% YoY to ₹1,709 crore. However, this aggressive expansion led to wider losses, with an Adjusted EBITDA loss of ₹178 crore in Q4 FY25[1].
Company Impact
- Goal: Scale, Not Profitability Eternal emphasized that Blinkit's profitability isn't the immediate focus; instead, its goal is to create a rock-solid and reliable network, with profits expected to follow as the company scales[1].
- Closing the Unprofitable In an effort to streamline operations, Eternal announced the shutdown of services like Zomato Quick and Everyday, as they failed to demonstrate a clear path to profitability[4].
- Expansion on the Horizon Blinkit is aiming to expand its store count to 2,000 by December 2025, which has the potential to boost its market presence but may pose challenges in maintaining profit margins[4].
All in all, Eternal's Q4 FY25 financial results indicate impressive revenue growth coupled with a steep decline in profits. This is predominantly the result of increased expenses, particularly in relation to Blinkit. The company's strategy has now shifted towards scaling the quick commerce segment, with profitability expected to follow as the business grows further.
- The decrease in Eternal's net profit, attributed to an increase in expenses, instigated a lively discourse in the financial and tech-focused business sectors.
- Investors in the decentralized finance ( DeFi ) market might find Eternal's plummeting net profit a concern, as its YoY drop and soaring expenses could potentially impact its dividend returns.
- Krishna, an analyst at Hyperpure Research, highlighted that Eternal's focus on scaling Blinkit instead of immediate profitability is a strategic move that mirrors the growing trend in the market to prioritize growth over short-term earnings.
- As Eternal aims to expand Blinkit's store count to 2,000 by FY24, there may be a growing interest among investors seeking lucrative opportunities in the quick commerce market, despite the challenges in maintaining profit margins.
- Given the strong growth of Blinkit, despite its wider losses, astute investors may see this as a potential investment opportunity, especially in the long run, when the company's focus shifts towards profitability.
- In light of Eternal'sQ4 FY25 financial results, it's fascinating to observe how the company's emphasis on finance, technology, and business growth impacts the entire market landscape and sets new trends for the coming years.
