Zomato CEO Deepinder Goyal says budget food delivery services from rivals like Swiggy and Rapido lack sustainable economics. The company is instead focusing on its 'Bistro' project to optimize delivery for low-price orders. Zomato reported a net profit of ₹92 crore for the June quarter, marking a significant rise from the previous year.
Detailed Coverage
Zomato founder and CEO Deepinder Goyal has downplayed the competitive threat posed by rivals like Swiggy and Rapido in the budget food delivery space. During the company's recent earnings call for the quarter ending June 2026, Goyal stated that the customer interest seen in these lower-cost offerings is largely driven by discounts rather than a durable business model. He noted that the impact on Zomato's main operations has been limited, suggesting that growth reliant on heavy discounting is difficult to maintain over the long term.
Instead of engaging in a price war, Zomato is channeling its resources into 'Bistro.' This initiative aims to make food delivery profitable for items priced between ₹50 and ₹150 by rethinking the supply chain from the ground up. Rather than focusing on discounts, the project uses custom kitchen equipment, specialized workflows, and automation designed for high-volume, limited-menu formats. The company views this as a shift toward a manufacturing-style operating model that prioritizes speed and efficiency.
Performance and Market Position
Zomato reported a consolidated net profit of ₹92 crore for the first quarter of the 2027 financial year, representing a 268% increase compared to the same period last year. Revenue from operations reached ₹20,211 crore. The core food delivery business saw its Net Order Value rise by over 20% to ₹10,769 crore. Meanwhile, the quick commerce arm, Blinkit, showed strong growth with a Net Order Value of ₹17,132 crore and achieved an adjusted EBITDA of ₹102 crore.
Blinkit CEO Albinder Dhindsa echoed the company's focus on long-term infrastructure over short-term discount-led growth. He argued that focusing solely on pricing can lead to high cash burn and weak unit economics. By contrast, the company is prioritizing geographic expansion and deeper assortment to build long-term operating leverage.
Strategic Challenges and Monitorables
While the company continues to see strong growth, investors should monitor the execution risks associated with the Bistro project. Developing a new food manufacturing and supply chain model involves significant operational complexity. The success of this strategy will depend on whether Zomato can maintain food quality and consistency at a lower price point while scaling its new kitchen workflows. Furthermore, the quick commerce sector remains highly competitive, and sustained investment in infrastructure and geographic reach will continue to be a primary area for investors to watch in coming quarters.