Zomato shares climbed 2% on Thursday as strong revenue growth outweighed a miss on quarterly profits. Investors are focusing on the performance of the Blinkit quick commerce segment and improved operational margins despite the bottom-line shortfall.
Detailed Coverage
Shares of Zomato Ltd rose 2% in early trade on Thursday, reaching Rs 290.10, even as broader market indices showed weakness. The positive movement follows the company's first-quarter financial results for FY27, where revenue growth surpassed analyst expectations, drawing investor attention away from a shortfall in net profit.
Revenue Growth and Operational Performance
Zomato reported consolidated revenue of Rs 20,211 crore for the quarter ending June 30, 2026, which outperformed the forecast of Rs 19,850 crore. This result reflects a 17% increase compared to the previous quarter and is more than double the revenue reported in the same period last year. On the operational side, the company reported an EBITDA of Rs 594 crore, a 22% increase over the previous quarter. The EBITDA margin, a key metric for gauging operational efficiency, saw a marginal expansion to 2.9% from 2.8% in the preceding quarter.
Profitability and Segment Focus
The company posted a consolidated net profit of Rs 92 crore for the first quarter of FY27. This figure fell short of market estimates which had projected a profit of Rs 335 crore. The reported profit also represents a 47% decline compared to the Rs 174 crore earned in the quarter immediately prior. Despite this, investors appear to be prioritizing the growth trajectory of the Blinkit quick commerce business. Management commentary highlighted improving profitability trends within the quick commerce division and stable competitive conditions, which helped calm concerns regarding the profit miss.
Understanding Market Sentiment
While the company continues to expand its reach, the quick commerce sector remains highly capital-intensive with intense competition from players like Swiggy and Zepto. Investors often monitor how Zomato balances this heavy expansion spending with the need to maintain or improve margins. While the company has shown a significant year-on-year jump in profit compared to the Rs 25 crore reported in the same quarter last year, the sequential dip in profit highlights the volatility that can occur during phases of rapid scale-up.
The key focus for shareholders moving forward will be the company’s ability to sustain revenue momentum while managing the rising costs associated with its quick commerce expansion. Investors will likely track the Blinkit unit’s path toward higher profitability in the coming quarters and monitor any shifts in competitive pressure that could affect margins.