Zomato Q2 FY26: Revenue Soars, Profit Slides

Zomato Limited, India’s leading food delivery and restaurant discovery platform, released its Q2 FY26 results on 16 October 2025, presenting a fascinating blend of extraordinary revenue growth and a steep fall in net profits. The company’s revenue more than tripled year-on-year, reflecting strong business momentum across food delivery, dining-out, and quick-commerce segments. However, profits dropped sharply on a consolidated basis, weighed down by higher expenses, aggressive expansion, and strategic investments in its growth engines.

The results triggered mixed reactions in the market and among analysts — some lauding the company’s revenue scale-up, while others expressed caution over profitability pressures and the sustainability of margins. Let’s take a detailed look at Zomato’s quarterly performance, financial breakdown, share price trends, and analyst outlook.

Zomato Q2 FY26: Key Financial Overview

Zomato delivered a blockbuster performance in revenue terms during Q2 FY26, demonstrating its growing dominance in India’s online food and grocery delivery ecosystem. However, the profit front painted a more complex picture, with consolidated profits declining significantly year-on-year.

Extracts of FY25 & FY26 Financials

Zomato Q2 FY26 Performance Summary (YoY Comparison)

• Revenue from operations (consolidated): ₹13,590 crore in Q2 FY26, up from ₹4,799 crore in Q2 FY25 — a jump of 183.18% YoY.

• Profit after tax (consolidated): ₹65 crore in Q2 FY26 versus ₹176 crore a year ago — a decline of 63.07% YoY.

• Standalone revenue: ₹2,650 crore in Q2 FY26 versus ₹2,151 crore a year ago — up 23.20% YoY.

• Standalone profit: ₹691 crore versus ₹421 crore — up 64.13% YoY.

In short, while revenues surged sharply, consolidated profit growth took a severe hit due to higher operating and acquisition-related costs. This indicates that Zomato’s expansion — particularly in the quick-commerce and logistics arms — is still in its investment-heavy phase, with long-term benefits expected to accrue gradually.

Understanding the Numbers: Why Revenue Soared but Profit Slipped

The divergence between Zomato’s skyrocketing revenue and plunging consolidated profit reveals the trade-off between scale and profitability.

1. Revenue Boom: Growth Across Segments

The company’s 183% YoY revenue growth was driven by impressive performance across multiple business lines:

• Food Delivery: The core delivery business saw robust order volumes and higher average order values (AOV). Zomato continues to lead the Indian market alongside Swiggy, benefiting from urban expansion and new customer acquisition.

• Quick Commerce (Blinkit): Blinkit’s explosive growth contributed significantly to the consolidated topline. The quick-commerce arm has seen strong traction in Tier 1 cities and improved unit economics due to faster deliveries and optimized warehousing.

• Dining and Gold Membership: The dining-out and “Zomato Gold” loyalty programs boosted engagement levels, attracting both restaurant partners and repeat customers.

• Hyperpure (B2B Supplies): Zomato’s restaurant supply chain business, Hyperpure, continued to scale steadily, serving as a complementary vertical to its core operations.

2. Profit Decline: Higher Costs and Investments

Despite revenue growth, consolidated PAT dropped from ₹176 crore to ₹65 crore, marking a 63% YoY decline. Several factors contributed to this:

• Increased Marketing and Customer Acquisition Costs: Zomato ramped up promotional spending during Q2 to capture market share ahead of the festive season.

• Rising Employee and Delivery Costs: Expanding delivery capacity and technology hiring increased operating expenses.

• Blinkit Integration Costs: Consolidation of Blinkit’s financials and infrastructure investments affected short-term profitability.

• Depreciation and Finance Costs: Higher capital expenditure on dark stores, warehousing, and technology infrastructure led to elevated depreciation and interest costs.

• ESOP-Related Expenses: Employee stock option expenses also added to the overall cost structure, impacting net margins.

About Zomato Limited

Founded in 2008 as Foodiebay, and later rebranded to Zomato in 2010, the company has evolved from a restaurant listing platform to a comprehensive food-tech ecosystem.

Headquartered in Gurugram, Zomato operates in over 500 cities in India and a few international markets. Its ecosystem spans multiple verticals:

• Food Delivery: The flagship platform connecting customers to restaurants and delivery partners.

• Quick Commerce (Blinkit): Instant grocery and essentials delivery service.

• Dining and Table Reservations: Online table booking and dining-out experiences.

• Hyperpure: B2B food supply service for restaurant partners.

• Zomato Gold: A subscription-based loyalty program offering discounts and benefits to customers.

Zomato’s mission is simple yet powerful — to provide better food for more people through digital innovation. Its long-term strategy revolves around achieving profitable scale while deepening engagement across its ecosystem.

Zomato Share Price Performance

Zomato’s share price has remained one of the most actively tracked in the Indian stock market due to its rapid growth and high volatility.

• On 17 October 2025, the stock opened at ₹338.40 per share.

• During the session, Zomato’s shares traded around ₹342.75 per share, marginally below their opening level.

• Over the past month, Zomato’s shares have gained 4.42%, reflecting steady investor sentiment.

• In the last six months, the stock has surged 47.99%, showing growing optimism about Zomato’s quick-commerce expansion.

• Over the past year, the share price has delivered 26.69% returns, outperforming several peers in the consumer tech space.

While the short-term market reaction to Q2 results was mixed, the stock’s long-term performance reflects investor belief in Zomato’s potential to dominate India’s evolving food and grocery delivery ecosystem.

Zomato Q2 FY26 Highlights

1. Revenue Growth: Consolidated revenue jumped 183.18% YoY to ₹13,590 crore — a record high for the company.

2. Profit Decline: Consolidated PAT dropped 63.07% YoY to ₹65 crore, reflecting near-term cost pressures.

3. Standalone Strength: Standalone profit rose sharply by 64.13% to ₹691 crore, indicating strong operational performance in core business areas.

4. Expansion in Quick Commerce: Blinkit continued its rapid city-wise rollout, contributing meaningfully to revenue growth.

5. Improved Market Share: Zomato gained further market share in both food delivery and quick-commerce categories.

6. Focus on Profitability: Despite near-term dips, management reaffirmed its goal of maintaining profitability on a sustainable basis.

What’s Behind Zomato’s Strategy?

Zomato’s FY26 strategy centers around long-term market leadership, not short-term profit maximization. The company is executing a deliberate shift — scaling up its ecosystem aggressively now, while laying the groundwork for profitability later.

1. Scaling Blinkit and Hyperpure

Blinkit has become a key growth engine for Zomato. The company continues to invest in expanding its dark store network, optimizing last-mile logistics, and improving delivery efficiency.

Hyperpure, its restaurant supply arm, is also expanding its warehouse footprint to ensure end-to-end integration — from farmer to restaurant.

2. Leveraging Data and AI

Zomato is increasingly relying on artificial intelligence and data analytics for personalized recommendations, route optimization, and cost-efficient delivery. These technology-driven efficiencies are expected to enhance profitability in the coming quarters.

3. Strengthening Customer Retention

With over 80 million active users, Zomato’s focus is now on increasing repeat order rates through loyalty programs like Zomato Gold and cross-promotions between food delivery and Blinkit.

4. Path to Profitability

While the profit dip in Q2 FY26 raised eyebrows, Zomato’s management has reiterated that its core food delivery business remains profitable, and temporary losses arise primarily from high growth investments in Blinkit and other verticals.

The company expects margin improvement from FY27 onwards as these new businesses mature.

Analyst Outlook Post Q2 FY26

Following Zomato’s results, most analysts remain cautiously optimistic.

• Revenue Growth Potential: Analysts lauded Zomato’s exceptional revenue growth, crediting Blinkit’s contribution and improved monetization in the food delivery segment.

• Profitability Concerns: Many experts highlighted that the steep drop in consolidated PAT signals the cost of scaling too fast. They expect margins to remain under pressure for another two to three quarters.

• Valuation Outlook: Analysts estimate Zomato’s share price could reach ₹390.50 per share in the next 12 months under a bullish scenario. In a downside case, it could test ₹320.50 per share, depending on market sentiment and execution.

• Investment View: The consensus remains that Zomato is a long-term growth stock in India’s digital economy. Investors with high risk appetite and long-term vision could consider accumulating on dips.

Comparative Perspective: FY25 vs FY26

The data clearly illustrates that Zomato’s expansion strategy is driving massive revenue growth, but profitability remains inconsistent across its segments due to varying levels of maturity and cost intensity.

Challenges and Risks Ahead

Despite its promising growth trajectory, Zomato faces several risks that investors and analysts must closely monitor:

1. High Competition: Rivalries with Swiggy in food delivery and Zepto, BigBasket, and Instamart in quick commerce keep pricing tight and margins thin.

2. Rising Delivery Costs: Inflation in fuel and labor expenses directly affects last-mile delivery profitability.

3. Regulatory Risks: Increased scrutiny on platform workers’ rights, data privacy, and pricing regulations could impact future margins.

4. Execution Risk in Quick Commerce: Blinkit’s rapid expansion requires significant capital and operational excellence to maintain service quality.

5. Consumer Behavior Shifts: Economic slowdown or reduced discretionary spending could affect order frequency in food delivery and quick commerce.

These headwinds underline the importance of maintaining cost discipline and optimizing logistics as Zomato scales further.

Outlook: The Road Ahead for Zomato

Zomato’s Q2 FY26 results underscore both the potential and pitfalls of hyper-growth business models. While top-line momentum is outstanding, the immediate challenge is to sustain profitability amid aggressive expansion.

What to Expect in FY26–FY27

• Revenue Growth: Likely to continue in triple digits through FY26, driven by Blinkit and new customer acquisitions.

• Profit Recovery: Expected from FY27 as operational leverage improves and non-core costs stabilize.

• Focus Areas: Margin optimization, technology automation, and deeper penetration into Tier 2 and Tier 3 cities.

• Long-Term Vision: Zomato aims to become India’s largest consumer internet ecosystem spanning food, grocery, and dining — essentially, the “super-app” for everything food-related.

Investor Takeaway

Zomato’s Q2 FY26 numbers reveal a company in transition — moving from an early-stage growth story to a more mature, ecosystem-driven digital business. Its aggressive push into quick commerce and logistics is paying off in terms of scale but pressuring short-term margins.

For long-term investors, this is a classic case of high-growth, high-risk opportunity. Zomato’s fundamentals remain strong — large addressable market, leadership position, and diversified revenue streams. However, short-term volatility in profits and costs will continue until its new verticals reach steady-state profitability.

Those looking for long-term capital appreciation may find Zomato an attractive bet, provided they can stomach short-term fluctuations. For conservative investors, it may be prudent to wait for clearer visibility on sustainable profit growth.

Conclusion

Zomato’s Q2 FY26 performance paints a tale of two extremes — explosive revenue growth and a sharp profit decline. While revenue soared by 183%, profit slipped 63% due to expansion costs, signaling the high-stakes journey of scaling digital businesses in India.

Yet, beneath these fluctuations lies a story of transformation. Zomato is no longer just a food delivery company — it is evolving into a multi-vertical digital powerhouse encompassing quick commerce, restaurant supply, and dining services. The coming quarters will test its ability to convert this growth into consistent profitability.

As the Indian consumer internet landscape matures, Zomato stands out as a bold, innovative, and fast-evolving player. The Q2 FY26 results may have raised questions about near-term earnings, but they also reaffirm one truth — Zomato is building for the future, not just for the quarter.

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