Zomato 2025: Startup Buzz or Real Growth Powerhouse?

Zomato has turned the tables for frequent diners into orderers, but can the same effect be replicated in investors who focus on safe stocks? Can a startup give investors the dreamy returns and safety?

Zomato has become a household name in India’s food delivery and restaurant discovery landscape. Evaluating it from an investment standpoint requires a comprehensive look at its journey, financial health, market position, and future prospects.​

Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato started as “Foodiebay,” a platform for restaurant discovery. Over the years, it expanded its services to include food delivery, online table reservations, and user-generated reviews. The rebranding to Zomato marked its ambition to become a global food-tech leader. In July 2021, it went public with an initial public offering (IPO) valued at over $8 billion, reflecting investor confidence in its growth trajectory. ​Source

What Are Zomato’s Core Business Segments?

It operates through several key business units:​

• Food Delivery: The primary segment, connecting users with restaurants for online ordering and delivery.​
• Blinkit: Acquired in June 2022, Blinkit (formerly Grofers) is Zomato’s quick-commerce arm, offering rapid delivery of groceries and essentials.​
• Hyperpure: A B2B platform supplying high-quality ingredients and kitchen products to restaurant partners.​
• District: Launched in August 2024, District focuses on live events and ticketing, expanding Zomato’s footprint in the entertainment sector. ​

How Has Zomato Performed Financially?

The company’s financial performance showcases robust growth:​

• Revenue: In Q3 FY2024-25, the delivery giant reported consolidated net sales of ₹5,405 crore, a 64.39% year-over-year increase. ​Source
• Profitability: The same quarter saw a net profit of ₹59 crore, down 57% from ₹138 crore in the previous year, attributed to increased competition and investments in expansion. ​Source
• Expenses: Total expenses rose to ₹6,131 crore in FY2024, up from ₹5,389.7 crore in the prior year, reflecting higher operational costs. ​Source

What Are Zomato’s Financial Metrics?

Zomato’s financial performance has shown improvement. For the fiscal year ending March 2024, key per-share ratios were (Source):

• Basic EPS: ₹1.61
• Diluted EPS: ₹1.57​
• Cash EPS: ₹1.66​
• Book Value per Share: ₹26.24​

Profitability ratios included a PBDIT margin of 22.68% and a PBT margin of 20.71%.

How Does Zomato Compare with Industry Peers?

Zomato’s main competitor is Swiggy, which went public in November 2024 with a $1.4 billion IPO. Swiggy’s shares debuted at ₹420 and rose to ₹448, valuing the company at nearly $12 billion. While both companies dominate India’s food delivery and quick commerce markets, It maintains a leading position with a 58% market share in food delivery, compared to Swiggy’s 34%. ​Reuters

What Are the Pros and Cons of Investing in Zomato?

Pros:

• Market Leadership: Zomato holds a significant share in India’s food delivery market, bolstered by its diverse service offerings.​
• Diversification: The acquisition of Blinkit and the launch of District demonstrate strategic diversification, reducing reliance on a single revenue stream.​
• Technological Integration: Investments in AI and data analytics enhance user experience and operational efficiency.​

Cons:

• Profitability Concerns: Despite revenue growth, achieving consistent profitability remains a challenge due to high operational costs and competitive pressures.​
• Regulatory Risks: The food delivery industry faces potential regulatory changes that could impact operations and profitability.​
• Market Competition: Intense competition from Swiggy and emerging players may affect market share and pricing strategies.​Reuters

What Are Zomato’s Future Plans?

The company has outlined ambitious growth strategies:​

• Quick Commerce Expansion: Plans to increase Blinkit’s presence, aiming to add 100 new stores in Q1 FY2025 and reach a total of 1,000 stores by March 2025. ​ET
• Technological Investments: Focus on AI-driven demand forecasting, route optimization, and expanding the electric vehicle delivery fleet to enhance efficiency.​
• Diversification: Exploring new verticals such as medicine and personal care delivery through Blinkit and expanding into the home-cooked meals segment.
• Profitability Goals: Aiming to reduce marketing expenses, improve logistics, and implement cost-cutting measures to achieve profitability in the near future. ​

How Is Zomato’s Stock Performing?

As of March 31, 2025, Zomato’s stock reflects its growth trajectory and market position. Investors should monitor factors such as profitability trends, competitive dynamics, and regulatory developments when evaluating its stock performance.​

---

Zomato’s journey from a startup to a food-tech giant showcases its adaptability and strategic foresight. While the company faces challenges in achieving consistent profitability and navigating a competitive landscape, its diversified business model and focus on technological innovation position it well for future growth. Investors should weigh the company’s market leadership and expansion plans against the inherent risks in the dynamic food delivery and quick commerce sectors.​

Disclaimer: This article is for informational purposes only. Investors should conduct their own research or consult a financial advisor before making any investment decisions.

If you’re a financial advisor yourself, refer to BeyondIRR for catering to your clients with top-notch technology carefully crafted to make your advisory better and tangible.If you want similar evaluation for other Nifty 500 stocks, stay subscribed and follow our blogs.