Zomato logged a mixed performance in Q3FY25 â€" Revenue grew 12.6% QoQ, in line with our estimate, led by the Quick Commerce (QC), Hyperpure, and Going Out. Food Delivery growth was muted, with GOV growing only 2.3% QoQ, largely attributed to broad-based slowdown from mid-Nov. Blinkit’s GOV surged 27.2% QoQ, continuing on the strong growth path. But profitability remained under pressure, as EBITDAM (as a % of GOV) fell to -1.3% from -0.1% in Q2FY25, due to accelerated store openings and heightened competitive intensity leading to higher customer acquisition cost. The management expects the losses in Blinkit to continue in the near term, due to aggressive store expansion; it now targets reaching store-count of 2,000 by Dec-25 (vs Dec-26 earlier); but the pause in margin expansion is expected to be temporary. Going Out also reported a loss, due to investments in the new District app. We cut FY25-27E EPS by 46-83%, building in the Q3 performance, lower Blinkit margin, and expansion plans. We retain BUY and Dec-26E DCF-based TP of Rs310.
