Zomato Q3 Results: Blinkit will remain loss-making for the near-term, management says

Shares of food delivery aggregator Zomato Ltd., ended over 7% lower on Monday, January 20, after the company reported its December quarter results, in which it expected further losses for its quick commerce business.

Zomato's quick commerce business, Blinkit, was back in the red on an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) basis during the December quarter.

Blinkit reported an EBITDA loss of ₹30 crore, compared to a positive EBITDA of ₹48 crore during the same quarter last year.

The management attributed the losses to accelerated investments towards expanding its stores. Blinkit reached 1,000 stores this quarter and the management expects that count to double by the end of the year, a full year ahead of its initial guidance of December 2026.

However, in the process of doing so, Blinkit is likely to remain loss-making in the near-term, the management said in its post-earnings letter to shareholders.

"Yes, we do. (On whether Blinkit losses will continue in the near-term) As we continue to bring forward store expansion, our networks may have to carry a greater load of under-utilised stores, which will impact near-term profits in the next one or two quarters," Zomato's letter said.

The management also said that these investments will result in the Gross Order Value (GOV) growth remaining meaningfully above 100% at least for financial year 2025 and 2026. Blinkit reported a GOV growth of 117% during the December quarter.

"Once we come out from this period of expansion, the business is likely to turn sharply from being loss-making to becoming meaningfully profitable as a larger part of our business starts comprising mature stores compared to the newly added ones. We remain confident of navigating the short-term expansion / competition with focus and discipline," the note said.

Shares of Zomato ended 7.3% lower on Monday, post the results announcement at ₹230.7.