Zomato, the Indian food delivery giant, has experienced a remarkable turnaround in its financial performance, especially in the fiscal year 2024-25 (FY25). After years of reporting losses, Zomato has achieved consistent profitability, marking a significant milestone in its journey as a publicly traded company. The question on many investors’ minds is: How much profit is Zomato making, and is this profitability sustainable?
Zomato’s Profitability: A Detailed Breakdown
Strong Financial Performance in FY25
Zomato reported a consolidated net profit of ₹253 crore for the first quarter of FY25, a dramatic increase from the modest ₹2 crore profit reported in the same quarter last year. This marks the fifth consecutive profitable quarter for the company, demonstrating that Zomato’s business model is finally yielding the desired financial results.
Revenue Growth
Zomato’s revenue from operations surged by 74% year-on-year, reaching ₹4,206 crore in Q1 FY25. This significant growth was driven by the robust performance of its core food delivery business and the rapid expansion of its quick commerce segment, Blinkit. The company’s Gross Order Value (GOV) also increased by 53% year-on-year, totaling ₹15,455 crore for the quarter.
Margin Expansion and Efficiency
The profitability of Zomato has been further enhanced by its focus on improving operational efficiency. The company reported an adjusted EBITDA of ₹299 crore for Q1 FY25, reflecting a significant improvement from the previous quarter. This growth in EBITDA was driven by margin expansion across all business segments, including food delivery, quick commerce, and B2B supplies through Hyperpure.
Is Zomato’s Profitability Sustainable?
Growth Drivers
Zomato’s continued profitability is underpinned by several factors. The rapid growth of its quick commerce business, led by Blinkit, and its dominant position in the food delivery market are key drivers. Additionally, the company’s strategic investments in technology and logistics have contributed to better cost management and operational efficiency, which are crucial for sustaining profitability.
Challenges Ahead
However, sustaining this profitability will not be without challenges. The food delivery and quick commerce sectors are highly competitive, with significant pressure from rivals like Swiggy, Amazon, and new entrants. Additionally, as Zomato continues to expand, managing costs while maintaining service quality will be critical.
FAQ
1. How much profit did Zomato make in Q1 FY25?
Zomato reported a net profit of ₹253 crore in Q1 FY25.
2. What was Zomato’s revenue in Q1 FY25?
Zomato’s revenue from operations reached ₹4,206 crore, marking a 74% year-on-year increase.
3. How has Zomato’s profitability improved?
Zomato’s profitability has improved due to margin expansion, increased operational efficiency, and strong growth in both its food delivery and quick commerce segments.
4. Is Zomato’s profitability sustainable?
While Zomato’s current profitability is promising, sustaining it will depend on managing competitive pressures and maintaining operational efficiency.
5. What are the main growth drivers for Zomato?
Key growth drivers for Zomato include its dominant market share in food delivery, the rapid expansion of Blinkit, and strategic investments in technology and logistics.