Eternal Zomato Faces Profit Slump But Revenue Shines in Q1 2025
The Indian food delivery giant Eternal Zomato posted a dramatic 90% drop in Profit After Tax (PAT) for the first quarter of FY2025, shaking up the expectations of many investors. Yet, the company surprised markets with a significant revenue beat, indicating robust operational growth. As of today, Eternal Zomato’s stock is trading at ₹298.85, reflecting cautious optimism among stakeholders.
Q1 Performance: A Mixed Bag of Results
For the quarter ended June 30, 2025, Eternal Zomato reported:
PAT: ₹12 crore, down 90% from ₹120 crore YoY
Revenue: ₹3,800 crore, up 42% YoY
EBITDA margin: 4.2%, down from 6.5% YoY
Gross Order Value (GOV): ₹15,400 crore, up 28%
The sharp decline in profit stems largely from higher marketing spends, new investments in logistics and quick commerce, and rising operational costs. However, the increase in revenue and order volume has offered a silver lining.
Why Is Zomato’s PAT Falling Despite Revenue Growth?
The divergence between revenue growth and PAT decline highlights Zomato’s current phase of aggressive expansion.
1. Investment in Blinkit and Hyperpure
Zomato continues to pour money into its quick commerce vertical Blinkit and B2B segment Hyperpure. While these ventures have promising long-term potential, they are not yet profitable. These investments are weighing heavily on quarterly profits.
2. Customer Acquisition and Loyalty Programs
The food-tech major has upped its spending on Zomato Gold loyalty programs, deeper discounts, and extensive marketing campaigns to retain and grow its customer base.
3. Fuel and Delivery Costs
With rising inflation and fuel prices, last-mile delivery costs have surged, reducing margins further.
Despite these challenges, the company’s strong topline growth indicates that consumer demand remains healthy and expanding.
Market Reaction: Confidence or Caution?
Zomato’s stock has shown remarkable resilience, trading at ₹298.85 after the Q1 earnings release.
This implies that investors may be factoring in the long-term growth potential of the company rather than reacting to short-term profitability concerns. Analysts believe that Zomato’s strategic positioning in Tier 2 and Tier 3 cities, coupled with its growing footprint in grocery and B2B, can drive future profitability.
What Lies Ahead for Eternal Zomato?
2025 Expectations
With Diwali and the festive season approaching in H2, food delivery volumes are expected to spike. Zomato’s management has already hinted at further AI integration, logistics optimization, and cross-branding synergies with Blinkit.
Analysts expect:
Q2 Revenue Estimate: ₹4,200 crore
PAT Estimate: ₹35-50 crore (depending on cost optimization)
Stock Target: ₹320-₹340 by Q4 FY2025
A Human Touch: Growth Is Not Always Linear
For everyday investors and consumers, Eternal Zomato’s journey reminds us that growth often comes with sacrifices. While profits may fall in the short term, building infrastructure for future returns is a marathon, not a sprint.
The company still serves millions of daily meals, supports thousands of delivery partners, and is building a robust ecosystem that supports local restaurants and businesses. Amid rising costs and operational challenges, Zomato’s focus on long-term scale and impact deserves recognition.
Conclusion
Eternal Zomato’s Q1 FY2025 report reflects the growing pains of a tech-driven unicorn transitioning into a sustainable enterprise. The 90% drop in PAT is certainly alarming on the surface, but soaring revenue and order volumes suggest deeper market strength.
As the company walks the tightrope between profitability and expansion, investors and customers alike will need to trust the process—because sometimes, numbers don’t tell the whole story.
