Zomato's ad expenses up by 63% to Rs 634 crore, profit declines to Rs 39 crore in Q4 FY25

Eternal Limited (formerly known as Zomato Ltd) on Thursday announced the fourth quarter result for the fiscal year 2025. The food and grocery ordering and delivery aggregator's advertisement, sales, and promotion expenses have soared by 63% in the March quarter of FY 2025.

Eternal consolidated ad and promotions expenses were Rs 634 crore between January and March FY25 compared to Rs 389 crore in the corresponding quarter last fiscal.

However, the consolidated profit in Q4 FY25 plunged by 77.7% to Rs 39 crore compared to Rs 175 crore in Q4 FY24.

Overall, Zomato spent Rs 1,972 crore on ads and promotions in overall FY25--an increase of 37.7% year-on-year (Rs 1,432 crore in FY24).

Eternal' profit for FY25 surged to Rs 527 crore compared to Rs 351 crore in FY24.

Zomato CEO Deepinder Goyal attributed the slowdown in growth to three key factors: sluggish demand, a temporary shortage of delivery partners due to the high demand of delivery partners in quick commerce, and competition from quick delivery of packaged food from quick commerce.

Additionally, Goyal noted that the increased competition in food delivery has also impacted company's growth in this segment.

The company's revenue from operation surged by 63.7% to Rs 5,833 crore in the March quarter for fiscal year 2025 while the total income rose to Rs 6,201 crore--up 63.3% YoY.

The revenue from the food ordering and delivery segment stood at Rs 2,054 crore in Q4 FY 24. And, for the entire fiscal 2025, it increased to Rs 8,080 crore compared to Rs 6,361 crore in FY 24.

On the other hand, the quick commerce vertical, called Blinkit, witnessed a revenue increase from Rs 769 crore in Q4 FY 24 to Rs 1,709 crore in March FY25. Blinkit's FY25 revenue soared to Rs 5,206 crore, up 126% YoY.

Eternal's B2B business, Hyperpure, also witnessed significant growth in revenue in both Q4 FY25, as well as, the overall fiscal year.

Hyperpure's Q4 revenue from operations was recorded at Rs 1,840 crore in FY 25. The overall business revenue in the same fiscal stood at Rs 6,196 crore--an increase of 95.3%.

On measures to revive the growth of the food delivery business, Goyal said he would continue to experiment and innovate around three key vectors: "wider assortment, better affordability, and lower delivery time".

Furthermore, Goyal informed that Eternal is shutting down Zomato Quick and Everyday due to a lack of profitability.

"We are not seeing the path to profitability in these without compromising on customer experience," Goyal said.