Zomato Q2 results: Net profit rises to Rs 176 crore, misses estimates

Indian food and grocery delivery firm Zomato reported a smaller-than-expected rise in second-quarter profit on Tuesday as the company added more new stores, which weighed on margins.

Its consolidated net profit rose nearly five-fold to Rs 176 crore ($20.94 million) in the quarter ended Sept. 30, but fell short of analysts' estimates of Rs 270 crore, according to data compiled by LSEG.
 

The company also approved raising up to Rs 8,500 crore via the issue of shares in a qualified institutional placement.

Competition in India's online food and grocery delivery sector remains tight, with rival Swiggy recently filing papers for an initial public offering, while media reports say that Zepto is eyeing a stock market debut next year.
 

To combat rising competition, Blinkit has been adding more stores to its network, which has hit Zomato's profitability, analysts at Elara Capital said.
 

Zomato is looking to increase its store count to 2,000 by the end of 2026.
 

The company's revenue rose nearly 69% to Rs 4,799 crore, slightly ahead of analysts' estimates of Rs 4,730 crore, per data complied by LSEG.