Eternal's Q4 profit crashes 78% to ₹39 crore as quick commerce bets eat into food delivery biz

Eternal Ltd (previously known as Zomato ) has reported a 78% year-on-year fall in its net profit at ₹39 crore for the fourth quarter of the financial year 2025(FY25), compared to ₹175 crore profit in the year-ago period, primarily due to enhanced investments in the company's quick commerce model. The bottomline was also impacted by other factors like sluggish demand, shortage of delivery partners and competition from quick commerce players.

The food-tech major's Q4 revenue from operations stood at ₹5,833 crore, up 65% from ₹5,405 crore in the year-ago period.

The consolidated adjusted EBITDA for the said quarter fell by 15% YoY to ₹165 crore due to the impact of accelerated store expansion in quick commerce. The company's profit before share of profit of an associate, exceptional items and tax stood at ₹97 crore in the said period compared to ₹124 crore in the year-ago period.

On a quarter-on-quarter basis, Eternal's profit fell 34% compared to ₹59 crore in the previous quarter of the financial year, while revenue surged 8% as compared to the December quarter. Moving to food delivery, what could be the reasons for the recent slowdown in growth? NOV growth remains subdued and well below the 20% YoY growth guidance.

Explaining the reasons behind the recent slowdown in the growth of the food delivery segment, Eternal CEO Deepinder Goyal, in the company's shareholder meeting, said the growth does remain below the company's expectations for now. "There are three key reasons behind the current slowdown in food delivery: 1. The sluggish demand environment (especially on discretionary spends), 2. Shortage (temporary) of delivery partners due to high demand of delivery partners in quick commerce, given the rapid expansion of the industry in the last few months 3. Competition from quick delivery of packaged food from quick commerce is leading to a drop in demand for food delivery from restaurants."

He said, on top of these, in this quarter, two other factors impacted growth -- the company delisted 19,000 restaurants and there was one less day in Q4FY25 compared to the same period last year.

"We delisted ~19,000 restaurants who either a) did not pass muster on hygiene standards based on severe customer escalations, b) were mimicking established brands and misleading customers, or c) operating multiple identical menu listings to hog more listing impressions. There was one less day in Q4FY25 compared to the same period last year (which was a leap year). Adjusted for the above two specific factors, NOV growth could have been higher by about 2 percentage points."

Overall, Goyal said the company does not see any long-term structural reason for this slowdown, as the fundamentals -- low penetration of restaurant food and increasing urbanisation and per capita income in India -- remain unchanged.

Share of Eternal had closed 0.58% up at ₹232.50 on the BSE on Wednesday.