Shares of Zomato Ltd (NSE:ZOMT) took a significant hit on Tuesday, falling as much as 13% following the Indian food delivery giant’s disappointing earnings report for the December quarter. The company’s stock was down 10.9% to 213.50 rupees by 11:08 IST (05:38 GMT), sharply underperforming the Nifty 50 benchmark, which dropped only 0.8%.
Zomato’s net profit for the three months ending December 31 fell by 57% to 590 million rupees ($7 million), falling far short of Bloomberg’s expected 230 million rupees. The earnings slump was primarily driven by increased competition in the quick commerce sector, particularly affecting Zomato’s Blinkit platform.
Blinkit, a key player in Zomato’s portfolio, has been struggling as new, well-funded competitors—such as Swiggy’s Instamart, Zepto, Flipkart-backed Walmart, BigBasket from Tata Group, and Amazon.com—intensified their presence in the sector. To maintain market share, Blinkit has resorted to aggressive discounting, which has put pressure on profit margins and led to weaker-than-expected earnings.
Zomato’s overall revenue grew to 54.05 billion rupees, narrowly exceeding the forecast of 53.82 billion rupees. While Blinkit still maintained its leadership position in India’s quick commerce market, its performance significantly weakened in the December quarter. The surge in competition has undercut Blinkit’s profitability, with food delivery—the company’s primary revenue generator—struggling to compensate for the shrinking margins.
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