Zomato Shares: Zomato shares suddenly fell by more than 7% in the last hour today. This decline came after the company’s quarterly results. As soon as Zomato released its December quarter results, there was a rush to sell its shares. After all, what was there in its quarterly results? What did investors look most disappointed by? Let us know the 3 biggest reasons behind this.
1. Aggressive expansion of Blinkit stores
Zomato’s third quarter net profit fell 57% to ₹59 crore. The biggest reason behind this was the rapid expansion of Blinkit stores. Zomato is continuously opening new stores to fulfill the orders coming on its quick commerce platform Blinkit platform. Due to this, its expenses have increased significantly and margins have decreased. The company said Blinkit-related losses widened to ₹95 crore in the December quarter. At the same time, its total adjusted EBITDA declined by 14 percent or Rs 45 crore.
Deepinder Goyal, Founder and CEO of Zomato, said, “Earlier we had set a target of opening 2,000 Blinkit stores by December 2026. But now it seems that we will achieve this target a year earlier i.e. in December 2025 and for this “We have intensified our investments. Due to this investment, Blikint’s losses have increased in this quarter.”
Zomato says that this expenditure was already decided, but the difference is that it has been incurred a little ahead of time and due to this, it has put pressure on the company’s margins.
2. Slow growth in food delivery business
The second reason is the slow growth in the food delivery business. Zomato’s gross order value (GOV) grew just 2% over the previous quarter. This figure is much lower than investors’ expectations. Rakesh Ranjan, CEO of the company’s food delivery business, said, “Our food delivery business is expected to grow by more than 20% annually. But growth does not always remain the same. We are currently going through a recession, but we “Long-term strength is expected.”
The company also said that a decline in demand has been seen since the second half of November. However, Zomato is confident of achieving 20% annual growth in GOV.
Meanwhile, Zomato has launched a new app named District. The expenditure on the team, marketing and technical costs of this app has also become a major reason for the company’s quarterly loss. The company has invested a lot in this. The company said that we are likely to operate at a loss on this District app for the next one year.
Zomato’s rising employee costs
The third reason was Zomato’s increasing employee costs. The company’s employee costs increased by 21% in the December quarter. This increase was due to two reasons – recruitment of new employees and competition for talent i.e. retaining good employees.
“Our total employee costs will remain high for the next few quarters. However, by FY26, we plan to reduce it to 6-8% of adjusted revenue,” said Akshant Goyal, CFO, Zomato. The company says that hiring has increased due to new businesses like Blinkit and District. Because of this, Zomato has to spend more on employees.
Zomato’s December quarter net profit declined by 57 percent to Rs 59 crore. Whereas in the same quarter last year, the company had made a profit of Rs 138 crore. At the same time, the revenue of its food delivery business increased by 22 percent annually, while Blinkit’s revenue saw a two-fold increase.
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