Eternal Zomato Shares Surge Nearly 10% After Q1 FY25 Results; Margin Woes Linger
Shares of Eternal Zomato Business jumped 9.91% on Tuesday, closing at ₹372.15 on the NSE, after the company posted its Q1 FY25 earnings. The food delivery major showed strong topline growth and resilient user engagement, but concerns remain around profit margins, which saw pressure due to elevated logistics and marketing costs.
Q1 FY25 Key Financials (Consolidated):
Adjusted Revenue (ex-quick commerce): ₹1,647 crore (up 8% YoY)
Revenue from Operations: ₹2,416 crore (up 18% YoY)
Net Profit: ₹36 crore (down from ₹41 crore in Q4 FY24)
EBITDA Margin: 2.7% (vs 3.2% in Q4 FY24)
Quick-commerce revenue (Blinkit): ₹769 crore (up 97% YoY)
🔹 Q1 FY25 Key Financials (Consolidated):
- Revenue from Operations: ₹2,416 crore (up 18% YoY)
- Net Profit: ₹36 crore (down from ₹41 crore in Q4 FY24)
- EBITDA Margin: 2.7% (vs 3.2% in Q4 FY24)
- Quick-commerce revenue (Blinkit): ₹769 crore (up 97% YoY)
- Adjusted Revenue (ex-quick commerce): ₹1,647 crore (up 8% YoY)
🔹 Mixed Quarter, but Optimistic Outlook
While the company’s Q1 performance fell slightly short of street expectations on profitability, management commentary remained upbeat, especially around the rapid scale of Blinkit, their quick-commerce vertical, which is nearing breakeven.
CEO Deepinder Goyal emphasized operational expansion:
“We added 75 new dark stores for Blinkit in Q1 and plan to maintain this pace in the coming quarters. We’re moving closer to profitability in quick commerce, and our core food delivery remains stable with a loyal user base.“
🔹 Jefferies Upgrades to ‘Buy’ with ₹400 Price Target
International brokerage Jefferies upgraded Eternal Zomato’s rating to ‘Buy’, citing the company’s growing quick-commerce segment, improving unit economics, and long-term leadership potential in India’s online food and grocery space.
“While Q1 was a mixed bag, we see significant value creation from Blinkit. Management’s positive commentary on breakeven timelines and dark store rollout gives us confidence,” said Jefferies in its note, raising the target price to ₹400 per share.
🔹 Segment Highlights
- Food Delivery GMV: ₹8,330 crore (up 9% YoY)
- Food Delivery EBITDA: ₹88 crore (slightly down due to higher delivery costs)
- Blinkit (Quick Commerce):
- Revenue: ₹769 crore (up 97% YoY)
- Adjusted EBITDA: ₹(37) crore (loss narrowed from ₹(60) crore YoY)
- Store Count: 526 (as of June 30, 2025)
🔹 Challenges Ahead
Despite strong growth in Blinkit and overall revenue, the decline in margins sparked some concern among analysts. Delivery costs, tech investments, and aggressive store expansion continue to impact bottom-line metrics.
“Eternal Zomato needs to find the right balance between growth and profitability, especially in the face of rising competitive pressure from Swiggy and ONDC integrations,” said an analyst at ICICI Securities.
🔹 Market Reaction
The stock’s sharp rally reflects investor confidence in the company’s future trajectory. Eternal Zomato now trades at a 52-week high, buoyed by sentiment around its potential to dominate both food and grocery delivery verticals in India.
📊 Outlook for FY25
- Continued investments in dark stores (quick-commerce)
- Focus on reducing delivery partner turnaround time
- Targeting Blinkit breakeven by Q4 FY25
- Strong seasonal performance expected in festive Q2
