Zomato's Q3 net profit plummets as Blinkit piles up losses to take on rivals Zepto, Swiggy
Zomato reported a steep 57% year-on-year (YoY) fall in net profit for the October-December period at Rs 59 crore, as its quick commerce unit Blinkit stepped up on spending and expansion to stave off competition from rivals such as Swiggy and Zepto.
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During the quarter, Zomato reported a 64% YoY jump in its operating revenue at Rs 5,405 crore with quick commerce continuing to grow rapidly even as growth in its mainstay food delivery business slowed down during the three months.
For the quarter, Blinkit posted a Rs 103 crore adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) loss – significantly higher than Rs 8 crore in the July-September period. In the same period last year, Blinkit’s adjusted Ebitda loss had come in at Rs 89 crore. This metric represents the company’s operating performance and does not include costs undertaken on account of stock option grants.
Zomato’s stock price took a hit as a result of the earnings. The stock fell sharply after the results announcement. It ended Monday’s trade at Rs 230.70, down 7.3% on the National Stock Exchange (NSE).
The surge in loss is the result of increased digital marketing spends that Blinkit undertook during the period and the rapid ramp-up in store expansion, the company said.
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