“Zomato’s 15% loss in value in less than a day has a lot to do with affected profit margins in high-growth q-commerce,” wrote Aviral Bhatnagar, founder and managing partner of AJVC.

His statement underscores the mounting pressures Zomato is facing, particularly through its e-commerce arm, Blinkit.

As Bhatnagar said, “Q-commerce has become extremely fierce and it shows in Blinkit’s profit margins. High-growth companies swing both ways in terms of profit growth/loss” .

The sharp drop in Zomato shares reflects the challenges of balancing aggressive expansion with profitability.

Blinkit reported an impressive 27.2% quarter-on-quarter increase in gross order value (GOV) in 3Q25, achieving an impressive annualized run rate of ₹31 billion. However, the costs of this growth are evident, with EBITDA falling to -1.3% from -0.1% in Q2, largely due to accelerated store openings and expenses higher customer acquisition.

The fast-casual business added 216 stores this quarter, surpassing the 1,000-store milestone. Blinkit management is now targeting 2,000 stores by December 2025, a year ahead of schedule. Analysts such as Nuvama suggest that this expansion may “hurt profitability in the short term, but will ultimately lead to increased profitability in the coming quarters as these stores mature.”

Zomato’s core food delivery business also faced headwinds, with GOV growth of 2.3% quarter-on-quarter, reflecting a broader slowdown. The company’s management acknowledged weaker demand since November, but noted a steady improvement in contribution margins.

Zomato’s B2B venture, Hyperpure, continues to scale effectively. With EBITDA margins close to breakeven, this segment remains a key contributor, highlighting Zomato’s ability to diversify beyond food delivery.

To reduce reliance on food delivery, Zomato has entered the entertainment space with a new app targeting event and movie tickets. With ambitions to rival BookMyShow’s 60% market share, this move reflects the company’s commitment to creating a wider ecosystem.

Global brokerage firms have cut Zomato price targets, with Macquarie setting a low of ₹130. Analysts warn that increased trade competition and rising digital marketing costs could further squeeze margins, despite promising long-term growth potential.