The Zomato food delivery company of Zomato on Monday recorded a 90% decrease on an annual basis (YOY) of the consolidated net profit for the Q1fy26, at RS 25 Crore compared to RS 253 Crore in the same quarter as last year. The Zomato and Blinkit operator reported entry from RS 7,167 Crore operations, growing 70% from RS 4.206 Crore a year ago.
The earnings have been announced during the market hours and Eternal shares increased by over 7% after the announcement, hitting the maximum of the day of RS 274 on NSE.
The strong decline in profits was due to the continuous investments in the rapid segment of trade and outgoing.
“On the profitability front, the consolidated rectified ebitda decreased by 42% on an annual basis at RS 172 crores in Q1fy26, largely due to the continuous investments in rapid trade and traveling, which were partly compensated by the improvement of the ebitda Margin food delivery (as% of Nov) to 5.0% from 3.9% to a year ago.The company also reported a 15% jump in its expenses Q1fy26 to RS 2.137 Crore, mainly under garments such as “Delivery and related charges” and “Advertising promotion and sales”.
The expenses stood at 1,936 crores in Q4fy25 and RS 1,854 crores in Q1fy25.
The value of the net order (Nov) of Eternal B2C activities grew by 55% on an annual basis and 16% of quarter to Quarto at 20,183 RS in Q1fy26.
“This was the first quarter in which our rapid trade has exceeded Nov’s food delivery for the entire quarter. On an annualized basis, we are now almost $ 10 billion in November in all our B2C activities, with a rapid trade that has become our largest segment, checking almost half of the annual”, said the company in its letter to shareholders.
The consolidated rectified revenues grew by 67% on an annual basis and 22% of qoq at RS 7,563 crores, and its growth rates have been stable here at 50%+ in the last 11 quarters, said the deposit.
B2B Business Hyperpure revenues grew by 89% on an annual basis (25% qoq) and the company includes de-Crescita in this activity in the next quarters.
Food delivery activities in Q1 and Outlook
The growth of the value of net orders (Nov) in the Zomato food delivery segment is slightly immersed at 13% on an annual basis in the Q1fy26, compared to 14% in the previous quarter. The gap between gross value value (Gov) and Nov’s growth expanded during the quarter.
The CEO Deepinder Goyal has declared to expect that Yoy’s growth runs out while the company recovers from the slowdown of the demand that started at the end of 2024.
“For the fiscal year, it seems unlikely that the company offers a 20% growth of Nov, but we should be north of 15% and we hope to go to make a 20% growth on an annual basis in exercise 27,” said Goyal.
To deal with the slow demand environment, Zomato saw an increase in the discounts financed by the restaurant (as a percentage of Gov) in the Q1fy26, which led to the growth of Nov lower than the Gov.
“We expect these quarterly fluctuations to be a regular feature since restaurants calibrate their investment in discounts based on the changes in demand,” Goyal observed.
The margins in the food delivery sector expanded Yoy but decreased in sequence, breaking a series of continuous improvements of 14 quarters.
“The margins both in the delivery of the food and in rapid trade tend to press under pressure in the first quarter due to the lower availability of delivery partners during the festivals and adverse weather conditions,” he explained.
“In the past, these pressures on the margins of Q1 have been compensated for improvements in other areas. But now that the food delivery margins have matured, the fluctuations led by seasonal factors are possible. In the long term, we still see the possibility of expansion of the margin, but our current goal is on the increase in investments to guide further growth while maintaining margins in 5% (of Nov).
Blinkit
Blinkit has added 243 new net shops in Q1fy26, bringing the total count of the shops to 1,544.
The company recorded 127% growth on an annual basis in November, led by an increase of 123% on an annual basis of average monthly transaction (MTC), from 7.6 million to 16.9 million.
The profitability has also improved: the margins have reduced from -2.4% in November in the Q4Fy25 to -1.8%, despite the investments in progress in new shops and pressure on seasonal costs.
“We are on the right way to reach 2,000 stores by December 2025,” said Albinder Dhibia, Blinkit CEO. “We have also added 0.4 million square feet of storage space in this quarter and now we manage over 5.6 million square foot across the country. Including the space of the archives, we manage ~ 10.4 million square foot in our supply chain.”
Dhinda also minimized concerns about profitability.
“Despite long-term infrastructure investments and intense competition, much of our activity is already profitable, with some cities that reach the Ebitda margins adequate to 2.5%+ (as a percentage of Nov). To achieve this phase so soon is a strong signal of our ability to achieve our long-term goal of 5-6% margins,” he added.
In competition
“New ideas, new competitors and interruptions are all inevitable. I think it will also make our activity stronger as long as we are able to learn, adapt and innovate potential competition. At this point, we see no innovation in the space that makes us believe that this activity is in any evident threat”, added Goyal.
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