Zomato Shares Rise About 5% Despite Significant Drop In Q4 Profit; Details Here

Zomato’s share price rises almost 5 per cent to Rs 237.00 on BSE Sensex even after the company reported a net profit decline for the second consecutive quarter. Net profit dropped 77 per cent year-on-year to Rs 39 crore in Q4 FY25, down from Rs 175 crore in Q4 FY24, largely due to rising expenses.

Despite the profit slump, revenue from operations surged 64 per cent to Rs 5,833 crore in Q4 FY25, compared to Rs 3,562 crore in the same period last year.

Nomura On Eternal (Zomato)

Global brokerage Nomura has slightly reduced its target price for Zomato to Rs 280 from Rs 290, citing lower near-term profitability in its quick commerce segment. This comes after the company raised $1 billion through a QIP in November 2024. Zomato held a cash balance of Rs 18,800 crore at the end of Q4 FY25.

Nomura highlighted the company's ability to avoid cash burn at the EBITDA level as a key positive. However, it warned that prolonged weakness in profitability could pose risks. The brokerage maintains a target price of Rs 280, factoring in a terminal growth rate of 6.5 per cent.

In Q4 FY25, Eternal’s total expenses surged 68 per cent year-on-year to Rs 6,104 crore, up from Rs 3,636 crore in the same quarter of the previous fiscal. “On the profitability front, consolidated Adjusted EBITDA declined 15 per cent YoY to Rs 165 crore in Q4 FY25, largely on account of the accelerated investments in expanding our quick commerce store network, which was partly offset by the improvement in food delivery Adjusted EBITDA margin to 5.2 per cent from 3.8 per cent a year ago,” said Eternal CFO Akshant Goyal.

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Nuvama On Eternal (Zomato)

Brokerage firm Nuvama maintained its Buy rating on Zomato but trimmed the target price slightly to Rs 300 per share from Rs 290, citing heightened competition in the quick commerce space. Blinkit, Zomato’s quick commerce arm, reported lower-than-expected losses in Q4 FY25 despite the rapid expansion of dark stores. Contribution margins improved, even with the dilution impact from newly opened stores.

Nuvama noted that the store expansion cycle appears to be peaking and expects adjusted EBITDA losses to begin narrowing from the next quarter. However, investor sentiment was dampened by management’s cautious outlook, stating that the business may remain subdued in FY26. While losses may not worsen, the ongoing investment phase means profitability is not anticipated in the near term.

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