Rs 44,600 crore loss! Zomato shares crash 18% in 3 days. Is the worst behind?

Shares of food delivery giant Zomato plunged as much as 5.1% on Wednesday to Rs 203.80 on the BSE, marking an 18.1% decline over the past three trading sessions. The sharp drop followed the company’s subdued Q3 FY25 results, which raised concerns about slowing growth and mounting losses in its quick-commerce unit, Blinkit.The market capitalization of Zomato eroded by Rs 44,620 crore during the three-day selloff, falling to Rs 2,01,885 crore as of Wednesday. The company reported a consolidated net profit of Rs 59 crore for Q3 FY25, down 57% year-on-year from Rs 138 crore. Revenue from operations rose 64% year-on-year to Rs 5,405 crore but grew only 13% sequentially, falling short of market expectations.

Zomato’s food delivery gross order value (GOV) increased 57% year-on-year to Rs 20,206 crore but missed estimates, with a YoY growth rate of 17%, falling 1.8% below projections. Meanwhile, Blinkit reported a 27.2% QoQ increase in GOV but continued to bleed cash, with EBITDAM declining to -1.3% compared to -0.1% in Q2 FY25.

The company expects the losses in Blinkit to continue in the near term, due to aggressive store expansion. Zomato has set an ambitious target to expand Blinkit’s store count to 2,000 by December 2025, a year earlier than previously planned, signaling its intent to solidify its quick-commerce market position despite ongoing profitability pressures.

Brokerages responded with mixed reactions to Zomato’s performance. Nomura revised its target price to Rs 290 from Rs 320, citing near-term challenges in Blinkit, while Jefferies reduced its target price to Rs 255 from Rs 275.

Nuvama and Kotak Equities set new targets at Rs 300 and Rs 275, respectively. UBS maintained its Rs 320 target price with a ‘buy’ rating, while Macquarie reiterated its ‘underperform’ rating and slashed its target to Rs 130.

Zomato acknowledged a slowdown in demand starting November, adding to investor worries about its growth trajectory. Despite recent struggles, 23 out of 27 analysts covering the stock still recommend a ‘buy,’ with a consensus average target price of Rs 305, according to Trendlyne data.With shares down more than 25% over the past month, analysts emphasized the need for Zomato to tackle competitive pressures and improve profitability to regain investor confidence.

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