Zomato Shares Slide 13% on Q3 Earnings Decline, Blink Competition By Investing.com
Investing.com – Shares Zomato Ltd (NSE: ) fell sharply on Tuesday after the Indian catering company reported the weakest earnings in the December quarter amid increasing competition in the fast-moving business sector’s Blinkit unit.
Zomato’s NSE-listed shares fell 10.9% to 213.50 rupees at 11:08 IST (05:38 GMT), after falling 13% earlier. This compares to a 0.8% decline from the benchmark.
Zomato’s net profit fell 57% to 590 million rupees ($7 million) in the three months to December 31, missing Bloomberg’s estimate of 230 million rupees.
The decline in profits was mainly due to the weakness of Zomato’s instant commerce platform Blinkit, amid rapidly increasing competition in the sector from rivals such as Swiggy Instamart, Zepto, as well as Walmart-backed Flipkart, Tata Group’s large basket and pocketed new entrants. Amazon.com (NASDAQ:
Zomato’s total revenue rose to Rs 54.05 billion, beating the previous estimate of Rs 53.82 billion.
Bilinkit has been a major growth driver for the company as the platform still dominates India’s fast-paced business sector. However, this lead was seen to diminish due to intense competition in the December quarter.
The segment has launched aggressive offers to capture more market share and revenue. But this trend has reduced Zomato’s profit margins to compensate for increased revenue from food delivery – Zomato’s biggest breadwinner.