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Time of India
09-06-2025
- Business
- Time of India
Eternal, Swiggy drop as Rapido undercuts food delivery commission
Shares of Zomato parent Eternal and its duopolistic rival Swiggy dropped as much as 2.5% and 4% on Monday as Rapido undercut them in commissions levied from restaurants. The unlisted ride-hailing platform is looking to foray in the food delivery space. Eternal shares closed 1.86% lower on BSE at Rs 256.99 per share, after hitting an intraday low of Rs 255.35. Prosus-backed Swiggy ended the day's trade 2.79% lower at Rs 364 a share, falling to Rs 360.10 apiece earlier in the day. The benchmark Sensex closed 0.31% higher at 82,445.21. The drop in shares comes after Rapido began partnerships with restaurants for its online food delivery service at nearly 50% lower commissions than Swiggy and Zomato. According to the agreed-upon terms with the industry body National Restaurants Association of India (NRAI), Rapido will charge a flat commission of Rs 25 for all orders below Rs 400, and Rs 50 for orders worth more than Rs 400. This translates to 8–15% of commission from restaurants, compared to 16–30% that Zomato and Swiggy charge, as ET reported. Recent months have seen multiple small restaurant owners calling out what they alleged are "steep charges" levied by Zomato and Swiggy. "Zomato is becoming unsustainable for small restaurant owners like us," Vandit Malik, founder of The Garlic Bread, wrote on LinkedIn three weeks back. "To even be visible on the platform, I'm forced to spend Rs 30+ per order on ads. What's left? Pennies. Sometimes, not even that," he alleged. The owners of another NCR-based small restaurant, Saffroma, wrote on X last week, which went viral, that it was quitting Zomato, alleging "zero payouts, mystery service charges and advertisements initiated without approval." The post has since been deleted. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Food delivery outlook India's online food delivery market is expected to more than double to $15 billion by March 2029, according to a December 18 report by JM Financial. Platforms had penetrated only about 11% of the country's total food consumption in 2023, compared with 40% in China and 58% in the US, it said. In a note dated June 2, Global financial services firm Morgan Stanley picked Deepinder Goyal-led Eternal as its top investment pick in the Indian food delivery sector, citing market leadership in both quick commerce and food delivery, healthy unit economics, stronger balance sheet than peers, and sound risk-reward. It kept its target price for Eternal 's stock at Rs 320 per share, implying a potential upside of 24.5% from the stock's current price. Initiating coverage on Swiggy earlier this month, the brokerage firm pegged its target price for the stock at Rs 405 per share, marking a potential upside of 11.3%.
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Business Standard
02-05-2025
- Business
- Business Standard
Eternal shares bounce 9% from day's low post Q4 show; is the worst over?
Eternal share price today, Zomato Q4 results: Food delivery and quick commerce company Eternal, formerly known as Zomato, staged a sharp intraday recovery in its share price on the BSE on Friday, May 2, 2025. From a low of ₹220.1 per share, Eternal share price bounced back 8.8 per cent to hit a high of ₹239.5 per share. At 12 noon, Eternal shares were trading 1.8 per cent higher on the BSE compared to the stock's previous closing price, at ₹235.3 per share. The BSE Sensex, on the other hand, was quoting around 300 points (0.36 per cent) higher. Why did Eternal share price rise today? Shares of Eternal recouped morning losses after most analysts maintained their 'Buy' rating on the stock after the Deepinder Goyal-led company reported its financial results for the March 2025 quarter (Q4FY25). Though they believe Eternal's profitability could stay under pressure in the near-term as the company is focused on capturing better market share, especially in the face of heightened competition, and prioritising growth over earnings, the worst could be behind the company after the April-June quarter of the current financial year (Q1FY26). This, they said, put the company on a long-term growth runway. Eternal Q4 results snapshot: During Q4FY25, Eternal reported an 8-per cent quarter-on-quarter (Q-o-Q) and 63.8 per cent year-on-year (Y-o-Y) rise in revenue at ₹5,833 crore. Segment-wise, Blinkit's gross order value (GOV) increased 20 per cent Q-o-Q/134 per cent Y-o-Y, while the food delivery business' GOV climbed 16 per cent Y-o-Y/down 1.4 per cent Q-o-Q. Also Read Hyperpure revenue grew 10.1 per cent Q-o-Q/93.5 per cent Y-o-Y to ₹1,840 crore, and Going-out GOV/Revenue grew 104 per cent/146 per cent Y-o-Y on a reported basis. On the margin front, food delivery segment's contribution margin rose to 8.6 per cent from 8.5 per cent in Q3FY25, whereas adjusted Ebitda (earnings before interest, tax, depreciation, and amortisation) margin as percentage of GOV improved 10 basis points Q-o-Q to 4.4 per cent. Further, while Blinkit's contribution margin improved 10bps Q-o-Q to 3.1 per cent in Q4FY25, its adjusted Ebitda margin (as % of GOV) fell 60bp Q-o-Q to -1.9 per cent, hit by higher marketing investments aimed at accelerating new customer acquisition. Overall, consolidated adjusted Ebitda fell 42.1 per cent Q-o-Q and 14.9 per cent Y-o-Y to ₹170 crore, adjusted Ebitda margin (as a percentage of adjusted revenue) contracted to 2.7 per cent (down 229bp Q-o-Q/234bps Y-o-Y), and net profit plunged 77.71 per cent Y-o-Y to ₹39 crore. ALSO READ | Indus Towers shares tumble 7% as Q4 profit dips; results breakdown here Will Eternal (Zomato) shares rise now? Time to buy? Brokerages answer: Nuvama Institutional Equities | Buy | Target: ₹290 The brokerage liked that Blinkit reported lower-than-expected losses despite an accelerated pace of dark store additions in Q4FY25. The segment's contribution margin also improved, even with dilution from newly opened dark stores. With the store expansion cycle likely peaking, the brokerage expects adjusted Ebitda losses to decline from the next quarter. ICICI Securities | Buy | Target: ₹310 The brokerage highlighted that Eternal posted better-than-expected adjusted Ebitda profitability in Q4FY25 on the back of contained quick commerce (QC) losses despite adding 294 dark stores and 1 million sq. ft. warehousing space. Moreover, this was possible in a quarter, with a seasonally lower AOV (down 5.9 per cent Q-o-Q), due to better mix; limiting expansion to new cities; and sustained improvement in ad revenues. While the management has cautioned about rising competition from non-QC channels, the brokerage believes QC margin will likely improve from Q1FY26. JM Financial Institutional Securities | Buy | Target: ₹280 Analysts at JM Financial suggest investors to use any dip in the stock, due to the management's cautious tone amid rise in competitive pressures over the near term, to build sizeable position in Eternal. It expects Blinkit to materially slowdown expansion of warehousing capacity and dark stores from Q2FY26 onwards, which should lead to meaningful operating leverage benefit and likely peaking-out of its losses in Q1FY26. Further upside to margins can come, as and when the business starts to move to an inventory led model, it added. ALSO READ | PNB Housing surges 8% after block deal; this shareholder exits company Eternal shares: Word of caution Analysts at Motilal Oswal Financial Services have cut their earnings estimates for FY26E/27E by ~52 per cent/27 per cent, driven by uncertainty arising from intense competition in the QC business and the accelerated expansion of the dark store network. The brokerage expects adjusted Ebitda to likely remain under pressure through FY26 as the company defends its market share and expands in the space. It has pushed back its profitability assumptions further, expecting Blinkit to just break even only in FY27.
India.com
01-05-2025
- Business
- India.com
Bad news for Deepinder Goyal as Zomato profits fall 78% due to..., company to shut down two new ventures after...
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.
Mint
01-05-2025
- Business
- Mint
Zomato shuts 15-minute food delivery service ‘Quick' four months after launch, confirms CEO Deepinder Goyal in Q4 report
Zomato announced its January-March quarter results for fiscal 2024-25 (Q4FY25) on Thursday, May 1, and informed it's shareholders that the leading food delivery giant will shut down it's 15-minute food delivery service 'Quick' and Zomato Everyday. Zomato 'Quick' was launched just four months ago. Responding to a question on Zomato 'Quick' and Zomato Everyday services, Zomato chief executive officer (CEO) Deepinder Goyal said in a letter to shareholders today, 'We are actually shutting down both these initiatives as we are not seeing the path to profitability in these without compromising on customer experience. The current restaurant density and kitchen infrastructure is not set up for delivering orders in 10 minutes which leads to inconsistent customer experience.' Zomato 'Quick', 'Everyday' shuts down As a result, Zomato did not see any incrementality in demand while it ran Quick as an experiment for a few months. With Everyday, the food delivery giant realized that the need for homely-meals is a limited use case largely for oce locations in metros. 'We did not see enough ROI by keeping it running at a small scale," confirmed Zomato CEO Deepinder Goyal. Zomato Everyday was a quick food delivery option that appeared on Zomato's explore page on the app, offering ready-to-eat, homely meals from select restaurants located within a two-kilometre radius. The option, however, is no longer visible. This was Zomato's second attempt to crack the quick food delivery market. Its earlier service– Zomato Instant, launched in 2022 – promised 10-minute deliveries in Bengaluru and Delhi-NCR but was shut down by January 2023. Eternal, which owns the Zomato and Blinkit brands, on Thursday reported a consolidated net profit of ₹ 39 crore for the fourth quarter ended March 31, 2025. The company, which rebranded itself as Eternal in March, had posted a net profit of ₹ 175 crore in the year-ago period. The company in a regulatory filing said that the results for the quarter and year ended March 31, 2025, along with the December-end quarter, are not comparable with other periods. The Deepinder Goyal-led firm's revenue from operations in the January-March quarter was at ₹ 5,833 crore. In the year-ago period it stood at ₹ 3,562 crore, the filing showed. However, during the quarter under review, Eternal's total expenses stood at ₹ 6,104 crore. Eternal witnessed a widening of losses in the quick commerce business Blinkit, the regulatory filing showed. The revenue reporting segments for the Group include India food ordering and delivery; Hyperpure supplies (B2B business); Blinkit (quick commerce); District (dining out and restaurant; and all other segments (residual). First Published: 1 May 2025, 04:29 PM IST
