Eternal's profit shrinks for second consecutive quarter even as revenue grows 63%

Eternal, formerly Zomato, saw its profits fall as much as 77% during the January-March quarter, even as the business grew by 63%, helped by strong growth in HyperPure, Blinkit, and the going-out segments.

May 1, 2025 - 12:17

Eternal's profit shrinks for second consecutive quarter even as revenue grows 63%

Quick commerce and food delivery firm Eternal saw its profits tank in the fourth quarter of FY25 as fierce rivalry in the quick commerce space prompted aggressive spending on expansion, weighing heavily on the company’s bottom line.

The Deepinder Goyal-led company clocked a whopping 77% decline in net profit to Rs 39 crore, from Rs 175 crore a year earlier. The net profit declined on a sequential basis too, as the company clocked Rs 59 crore in Q3.

Eternal, formerly known as Zomato, posted an over 63% growth in its consolidated operating revenue to Rs 5,833 crore, an improvement from Rs 3,562 crore in the corresponding period of the previous year. On an annual basis, the company registered 67% year-on-year (YoY) growth in its topline.

The Delhi-NCR-based company operates four primary segments: food delivery (Zomato), quick commerce (Blinkit), going-out (District), and B2B distribution (Hyperpure). In the fourth quarter, the company was added to the benchmark Nifty 50 index, however, its share price has fallen 15.91% since the beginning of the year.

Zomato, the company's largest segment, clocked an 18% YoY growth in topline to Rs 2,054 crore during the January-March 2025 quarter. On a QoQ basis, the segment showed a marginal decline, dragged down by a broader slowdown in urban consumption.

Its quick commerce arm Blinkit, widely seen as the market leader, saw its losses widen to Rs 82 crore, even as the platform's revenue more than doubled to Rs 1,709 crore. Aggressive investments for expansion, heavy discounting, and increased customer acquisition costs amid intense competition dragged down the segment's profitability.

Deepinder Goyal, Zomato — Deepinder Goyal, Co-founder & CEO, Zomato (Illustration credit: Aditya Ranade)

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Its B2B arm, Hyperpure, which supplies food ingredients and products to restaurants, saw robust growth, with revenue rising to Rs 1,804 crore, an improvement from Rs 951 crore earned in the year-ago period.

Meanwhile, its going-out vertical saw a significant boost, as its topline more than doubled to Rs 229 crore in Q4 FY25 from the previous year, however, the segment posted a de-growth of 11% compared to the October-December 2024 quarter. On an annual basis, the vertical's earnings nearly tripled.

Eternal's Blinkit is navigating stiff competition as its quick commerce peer Zepto prepares for a public debut. The space has also attracted strong attention from Flipkart and Amazon, which are working to retain their share within the broader e-retail market.

In an effort to strengthen Blinkit's operations, the company recently moved to cap foreign ownership in Eternal below a majority threshold. Achieving Indian-Owned-and-Controlled Company (IOCC) status would allow Blinkit to adopt an inventory-led model instead of the current marketplace approach, which would further improve margins in what is a cash-intensive business.

The company's food delivery business is also facing headwinds, with subdued consumer appetite for takeaways and intensifying competition. Ride-hailing platform Rapido is planning to enter the food delivery space, while Zepto Cafe is also on track to cross Rs 1,000 crore in annual recurring revenue (ARR) by 2026.

Food delivery aggregators are also encountering pushback from the National Restaurant Association of India (NRAI). Both Zomato and Swiggy are already under investigation by the Competition Commission of India (CCI) for alleged unfair practices. The issue has gained renewed attention following the launch of private-label restaurant offerings under Blinkit by Bistro, as well as Zomato Everyday, Swiggy Snacc, and Swiggy Daily.

Beyond its core operations, Eternal also marked its entry into the B2B SaaS space during the January-March 2025 quarter with the launch of Nugget, its in-house software solution. Nugget is an AI-powered, no-code customer support platform for businesses, capable of autonomously resolving up to 80% of queries. It currently supports over 15 million customer interactions across Zomato’s portfolio of brands, already translating into workforce efficiencies for its customer support team.

Edited by Kanishk Singh