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Q4 Profit Soars on Blinkit Growth, But Costs Bite
Zomato's fourth fiscal quarter of 2026 ended with strong financial results. Net profit jumped 346% year-on-year to ₹174 crore. This quarterly gain was supported by an 186% surge in adjusted revenue to ₹17,680 crore. Net order value (NOV) for its B2C segment also rose 54% to ₹26,880 crore. These figures show a significant operational improvement, largely driven by the fast growth of its quick commerce business, Blinkit, and better operating leverage across its units. Founder Deepinder Goyal noted the company is entering a phase of rapid scaling, aiming to double annual Gross Order Value to $20 billion within two years. However, this quarterly success sharply contrasts with the company's annual performance for FY26. Despite revenue increasing 168.6% to ₹17,292 crore in FY26, profit before tax fell 11.8%. This highlights the significant costs from Blinkit's aggressive market expansion impacting overall annual profitability.
Blinkit Drives Growth, But Profitability Remains a Challenge
The quick commerce segment, led by Blinkit, was a major growth driver for Zomato. Blinkit's net order value grew 95.4% year-on-year, and its adjusted EBITDA improved to ₹37 crore from ₹4 crore. The network added 216 net new stores, reaching 2,243 total. Blinkit's rapid scaling is also seen in its revenue growth, which has sometimes outpaced Zomato's core food delivery business. By Q1 FY25, Blinkit held a 46% market share in India's quick commerce sector, handling about 1.57 million orders daily. While it operated at a loss, like competitors, these losses were significantly reduced. The quick commerce market is large and growing, expected to reach over $7 billion in annual GMV in 2026. Despite strong market presence and operational gains, the segment is costly and has thin margins, making profitability difficult. Blinkit's contribution margin is improving, nearing positive levels, and EBITDA losses are shrinking, suggesting a move toward break-even. This focus on scaling has led to aggressive expansion, with Blinkit's GOV projected to grow 123% in FY26.
Food Delivery Unit Shows Resilience Amid Market Tailwinds
Zomato's main food delivery business also showed recovery, with net order value up 18.8% year-on-year, approaching its long-term target of over 20% growth. This segment reported adjusted EBITDA of ₹532 crore, a 24% increase, with margins improving to 5.5%. This recovery comes from strategic moves to reach more price-sensitive customers. Demand in food delivery remains steady, showing stability despite economic challenges and cost pressures. Analysts expect mid-to-high teens growth for this segment, with margins settling around 4.5% of GOV. The broader Indian e-commerce market provides strong support, expected to reach $200 billion by the end of 2026 and grow to $332.94 billion by 2031. Quick commerce is a key part of this growth, changing how consumers expect delivery speed across all e-commerce.
Concerns About Annual Profit and Valuation
Despite the strong quarterly results, deeper analysis raises concerns. The contrast between high quarterly profits and a falling annual profit for FY26, due to Blinkit's expansion costs, is a key issue. Zomato's market capitalization was about ₹2,46,663 crore as of April 28, 2026, with a P/E ratio of 97.6, or even higher figures like 1,067.81x reported for April 2026. These high valuations imply strong expectations for future growth and profit, which the annual profit decline challenges. The quick commerce sector is highly competitive, with companies like Zepto using aggressive pricing and discounts, which pressures margins for Zomato and Swiggy. Blinkit leads quick commerce market share at about 46%, followed by Zepto (29%) and Swiggy Instamart (25%). Regulatory issues also exist; Zomato is challenging a GST demand of ₹23.26 crore for FY18-19 and is cooperating with an antitrust investigation by the Competition Commission of India.
Analyst Views: Positive Outlook Despite Challenges
Analysts generally hold a positive view, pointing to Zomato's market leadership and growth prospects. For example, Citi raised its price target to ₹395 from ₹320 with a 'buy' rating in October 2025, citing Blinkit's strong growth and market position. Investec also gave a 'buy' rating with a ₹375 target price in April 2026, favoring Zomato over Swiggy due to its integrated model and scale. Brokerages like CLSA and Jefferies also maintain 'buy' or 'outperform' ratings with targets well above the current stock price, expecting significant gains from Blinkit's ongoing growth and better profitability. Management aims for $1 billion in adjusted EBITDA by FY29, building on FY24 profits. The company's ability to adapt and innovate has been key to its 18-year market presence.