Bad news for Deepinder Goyal as Zomato profits fall 78% due to..., company to shut down two new ventures after...

India.com

01-05-2025

Zomato co-founder Deepinder Goyal (File)
Zomato Q4 Results: In a major setback for Deepinder Goyal-led Zomato, now known as Eternal, the year-on-year (YoY) profits of the food delivery giant plummeted by a stunning 78 percent, dropping to Rs 39 crore in the quarter under review against Rs 175 crore in the same quarter last year. Zomato profits slump 78 percent
According to Zomato Q4 results 2025, the company witnessed a 33.9 percent loss in net profit, which dropped from Rs 59 crore in the previous quarter, while Zomato's revenue from operations increased 64 percent YoY to Rs 5,833 crore in Q4 FY25 from Rs 3,562 crore in the same quarter of the previous financial year, witnessing a 7.9 percent QoQ growth from Rs 5405 crore in Q3 FY25.
EBITDA slumped 55.6 percent QoQ from Rs 162 crore in Q3 FY25 to Rs 72 crore in Q4, while EBITDA slipped 176 bps QoQ at 1.2 percent in Q4 FY25 against 3 percent in Q3 FY25. Zomato's total expenses rose 67 percent YoY, from Rs 3,636 crore to Rs 6,104 crore, while QoQ expenses increased by over 10 percent.
The company's total income grew to Rs 6,201 crore, against Rs 3,797 in the year-ago period, amid rising total expenses. Deepinder Goyal cites reasons for Zomato slowdown
Addressing the slowdown in Zomato's growth, Deepinder Goyal cited three key reasons for the same.
'We think there are three key reasons behind the current slowdown in food delivery – 1. The sluggish demand environment (especially on discretionary spends) 2. Shortage (temporary) of delivery partners due to high demand of delivery partners in quick commerce given the rapid expansion of the industry in the last few months 3. Competition from quick delivery of packaged food from quick commerce leading to drop in demand for food delivery from restaurants,' Goyal said, according to reports.
The Zomato co-founder noted that besides the above reasons, two other factors impacted the company's growth in Q4 FY25. '1. We delisted ~19,000 restaurants who either a) did not pass muster on hygiene standards based on severe customer escalations, b) were mimicking established brands and misleading customers, or c) operating multiple identical menu listings to hog more listing impressions. As one of the leading food delivery platforms, we think it is critical to weed out bad actors which erode trust in the category. While this did impact order volumes, this was the right thing to do for the long term. 2. There was one less day in Q4FY25 compared to the same period last year (which was a leap year),' he said.
However, Deepinder Goyal, the Founder and CEO of Eternal (formerly Zomato), asserted that there isn't any long-term structural reason for the slowdown, 'as the fundamentals – low penetration of restaurant food and increasing urbanisation and per capita income in India – remain unchanged.' Zomato shuts down two new ventures
Meanwhile, Eternal has decided to shut down two new ventures, Zomato Quick and Everyday, citing the lack of a clear path for profitability in the future and dwindling customer interest.
'The current restaurant density & kitchen infrastructure is not set up for delivering orders in 10 minutes which leads to inconsistent customer experience. As a result, we did not see any incrementality in demand while we ran Quick as an experiment for a few months. With Everyday, we realized that the need for homely-meals is a limited use case largely for office locations in metros. We did not see enough ROI by keeping it running at a small scale,' Goyal said in a letter to shareholders.
Albinder Dhindsa, the Founder and CEO of quick commerce major Blinkit, which is also owned by Eternal (formerly Zomato), said the company will continue to focus on improving customer experience with more consistent delivery and fulfillment experience and increase the breadth of product categories that customers can reliably buy from the platform.