Synopsis
Zomato is likely to report strong Q4 growth, with revenue rising about 180% YoY and profit up nearly 430%, driven by Blinkit’s continued momentum and operating leverage. The core food delivery business is expected to remain steady, with NOV growth of 17–18% and margins improving slightly, supported by better cost control and higher take rates.Listen to this article in summarized format
The food delivery (FD) business is expected to remain stable, with net order value (NOV) growth of around 17-18% YoY. Margins in the segment are likely to improve slightly, with adjusted EBITDA as a percentage of NOV seen rising to around 5.5-6.1%, supported by better cost control and improved take rates of over 21%.
Analysts say demand in the food delivery segment has remained resilient despite macro headwinds. Bank of America noted no significant impact on order volumes from cost pressures such as LPG, although some moderation was seen in advertising spends by restaurants.
The spotlight, however, remains firmly on Blinkit. The quick commerce business is expected to deliver near triple-digit growth, with NOV likely to rise close to 98% YoY and around 10% sequentially. This growth is driven by expanding dark store networks, higher order frequency, and increasing consumer adoption of instant delivery.
Profitability in Blinkit is also showing early signs of improvement. Contribution margins are expected to turn positive at around 5%, while EBITDA losses are narrowing significantly. Brokerages estimate that Blinkit could report near breakeven EBITDA for the quarter, a key milestone for the business.
Motilal Oswal expects Blinkit's EBITDA margin to be close to -0.2% of NOV, while other estimates suggest a small positive contribution, indicating rapid improvement from earlier losses.
Hyperpure, Zomato's B2B supply business, is also expected to continue its growth trajectory, contributing to overall topline expansion.
Despite strong growth, analysts remain cautious on competition. The quick commerce segment is seeing rising intensity, with multiple players scaling aggressively. This makes the sustainability of margins and market share a key factor to monitor.
Key triggers for the stock post-results will include commentary on Blinkit's profitability timeline, competitive dynamics in quick commerce, and the growth outlook in food delivery.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
