ETERNAL Net Income Has Now Fallen Three Straight Quarters - Is the Profitable Era Cracking?

Two Segments Turned Unprofitable in the Same Quarter

This is Zomato Limited's Q3 FY25 (quarter ended December 31, 2024), unaudited, board-approved January 20, 2025 - the seventeenth quarter as a public company covered in this series. Like last quarter, no presentation deck, earnings-call transcript, or auditor's review report was filed alongside the regulatory result - the only source document available is the bare NSE XBRL numeric filing. This quarter's filing is thinner still than last quarter's: there is no balance sheet, no cash-flow statement, and no qualitative notes text of any kind beyond a one-line EPS disclaimer and a one-line segment-disclosure note. What follows is built entirely from the tagged statutory P&L and segment numbers - which tell a genuinely weaker story than last quarter's tax-driven wobble.

Revenue from operations grew 12.6% QoQ to Rs. 5,405 crore ($630.0M), continuing the growth streak and up 64.4% YoY. But profit before tax was cut nearly in half - Rs. 124 crore, down from Rs. 237 crore last quarter - and net profit for the period fell to Rs. 59 crore from Rs. 176 crore, a 66.5% QoQ decline. Unlike last quarter's flat-PBT, tax-driven story, this is a real operating deterioration: total segment result fell 6.4% QoQ, to Rs. 379 crore from Rs. 405 crore, the first sequential decline in this profitable streak. The reason is that Quick Commerce (Blinkit) and Going-out both swung from segment profits last quarter to losses this quarter - Quick Commerce from +Rs. 48 crore to Rs. (30) crore, and Going-out from +Rs. 18 crore to Rs. (15) crore (see Segment Results). On top of that, the exact cost dynamic flagged in last quarter's Prescription - unallocated corporate costs and finance costs growing faster than the business - happened again: the two combined grew 51.8% QoQ (Rs. 168 crore to Rs. 255 crore), consuming what was left of a declining segment result.

Net income has now fallen for three straight quarters - Rs. 253 crore in Q1 FY25, Rs. 176 crore in Q2 FY25, Rs. 59 crore in Q3 FY25 - each drop sharper than the last. Profit before tax has followed the same pattern for the last two quarters after peaking in Q1 FY25 (see Key Financial Metrics for the full trailing-quarter view). None of this moved the stock much - see Target Valuation Range for why a near-halving of profit barely registered in the share price this time.

The Prescription

Explain what happened to Quick Commerce and Going-out directly, and soon. Both segments swung from a profit to a loss in the same quarter, and without GOV, store-count, or Contribution-margin disclosures this quarter, a reader can't tell whether this is a deliberate reinvestment push (more dark-store openings, renewed discounting against quick-commerce competitors), a seasonal effect, or a genuine cost-control lapse. Management owes shareholders that distinction explicitly next quarter - a business that swings two of five segments to a loss in one reporting period without comment is asking investors to guess at the difference between "we're spending to win" and "we're losing control of costs."

Stop letting unallocated corporate costs and finance costs compound quarter after quarter without a word of explanation. This is the second straight quarter this exact thread has needed flagging: last quarter's Prescription called out a 40.8% sequential jump and asked whether it was one-off or structural. The answer, one quarter later, is that it grew again - unallocated costs plus finance costs combined rose a further 51.8% QoQ. Whatever this line item is, it is no longer a rounding error against segment profits; it is now large enough on its own to swing consolidated profitability, and it deserves the same disclosure discipline as any reportable segment.

Key Financial Metrics

Q3 FY25 (quarter ended December 31, 2024, unaudited) vs Q2 FY25 (quarter ended September 30, 2024) and Q3 FY24 (quarter ended December 31, 2023) - consolidated, reported in INR crore and USD (converted at approximately Rs. 85.79/$1 for Q3 FY25, Rs. 83.80/$1 for Q2 FY25, and Rs. 82.30/$1 for Q3 FY24)

Metric	Q3 FY25	Q2 FY25	QoQ	Q3 FY24	YoY
Revenue from Operations	✅ Rs. 5,405 crore ($630.0M)	Rs. 4,799 crore ($572.7M)	✅ +12.6%	Rs. 3,288 crore ($399.5M)	✅ +64.4%
Operating Income (Profit before tax)	⚠️ Rs. 124 crore ($14.5M)	Rs. 237 crore ($28.3M)	⚠️ -47.7%	Rs. 124 crore ($15.1M)	⚠️ +0.0%
Net Income (Profit for the period)	⚠️ Rs. 59 crore ($6.9M)	Rs. 176 crore ($21.0M)	⚠️ -66.5%	Rs. 138 crore ($16.8M)	⚠️ -57.2%
Adjusted EBITDA (management non-GAAP)	Not disclosed - no presentation filed	Not disclosed	n/a	Rs. 125 crore*	n/a
Free Cash Flow	Not available - no cash-flow statement in this filing	~Rs. 6 crore (derived)	n/a	Rs. 121 crore*	n/a

*Q3 FY24's Adjusted EBITDA and FCF figures, per the Q3 FY24 post, are management's own disclosed figures from that quarter's deck; no equivalent figures exist for either Q2 FY25 or Q3 FY25 since no deck was filed in either quarter (see above).

Three straight quarters of declining net income, each one worse than the last: Rs. 253 crore (Q1 FY25) → Rs. 176 crore (Q2 FY25, -30.4% QoQ) → Rs. 59 crore (Q3 FY25, -66.5% QoQ). Profit before tax shows the same shape after peaking at Rs. 239 crore in Q1 FY25: Rs. 237 crore, then Rs. 124 crore this quarter - a cumulative 48.1% drop from the peak in two quarters. Revenue growth, by contrast, has not slowed at all (+18.1% QoQ in Q1 FY25, +14.1% in Q2 FY25, +12.6% this quarter) - the business keeps growing the top line while converting less and less of it to profit. The YoY comparison needs a caveat too: PBT was, coincidentally, almost identical in nominal terms this quarter and a year ago (Rs. 124 crore both times), but on 64.4% more revenue - meaning PBT margin roughly halved YoY (3.8% of revenue a year ago to 2.3% now). Net income still fell 57.2% YoY despite flat nominal PBT, because Q3 FY24 carried a small net tax credit while this quarter carried a real Rs. 65 crore tax charge (Rs. 81 crore current tax against a Rs. 16 crore deferred tax credit).

This quarter's filing discloses no cash-flow statement and no balance sheet at all - not even the half-year-cumulative basis used last quarter. That is a genuine step down from the equivalent quarter a year ago: both the Q3 FY23 and Q3 FY24 filings disclosed nine-month cumulative cash flow and a balance sheet with a total-cash figure (Rs. 259 crore as of December 31, 2023, per the Q3 FY24 post). This quarter, neither exists in the sourced document - free cash flow and total cash are genuinely not available, not merely undisclosed on a different cadence (see Beyond the Usual).

Key Operational Metrics

No presentation deck was filed this quarter, and none of GOV^», Blinkit store count, average monthly transacting customers, restaurant-partner counts, or Contribution margin are tagged anywhere in the regulatory XBRL filing - these are genuinely not available this quarter. This is a real limitation for reading what actually happened at Quick Commerce and Going-out this quarter (see The Prescription): the segment-level revenue and result figures below are the only operational color available, with nothing to explain why either segment's underlying unit economics moved.

Segment Results

Zomato reports five business-line segments - India food ordering and delivery, Hyperpure (B2B restaurant supply), Quick commerce (Blinkit), Going-out (dining-out plus Zomato Live), and All other segments (residual). Segment result is operating profit/loss before unallocated corporate costs, other income, share-based payment expense, finance costs, and exceptional items. No segment assets/liabilities are tagged this quarter - the filing's own segment note states Ind AS 108 doesn't require this disclosure and the XBRL utility defaults every reportable segment's assets/liabilities to zero, same as last quarter.

Segment	Revenue (Q3 FY25)	QoQ	Segment Result (Q3 FY25)	Q2 FY25 Result	Margin (Q3 FY25)
India food ordering and delivery	✅ Rs. 2,078 crore ($242.2M)	✅ +3.3%	✅ Rs. 432 crore (profit)	Rs. 349 crore	20.8%
Hyperpure	✅ Rs. 1,671 crore ($194.8M)	✅ +13.4%	⚠️ Rs. (9) crore	Rs. (12) crore	-0.5%
Quick commerce (Blinkit)	✅ Rs. 1,401 crore ($163.3M)	✅ +21.2%	⚠️ Rs. (30) crore (loss)	Rs. 48 crore (profit)	-2.1%
Going-out	✅ Rs. 259 crore ($30.2M)	✅ +68.2%	⚠️ Rs. (15) crore (loss)	Rs. 18 crore (profit)	-5.8%
All other segments (residual)	Rs. 19 crore ($2.2M)	✅ +375.0%	Rs. 1 crore (profit)	Rs. 2 crore	n/m
Total segment result (before unallocated costs/finance costs)	Rs. 5,428 crore gross		⚠️ Rs. 379 crore	Rs. 405 crore

Every segment grew revenue, but two of five swung to a loss. India food ordering and delivery kept improving both lines - revenue up 3.3% QoQ, its best-ever segment result (Rs. 432 crore, up 23.8% QoQ, margin now 20.8% of segment revenue) - and remains, by a wide margin, the only segment carrying the business this quarter. Hyperpure continued its multi-quarter loss-narrowing trend (Rs. (9) crore from Rs. (12) crore) even as revenue grew fastest of any segment except Going-out (+13.4% QoQ). Quick commerce (Blinkit) is the real story: its revenue grew a healthy 21.2% QoQ, but its result swung from a Rs. 48 crore profit last quarter to a Rs. (30) crore loss - a Rs. 78 crore reversal in one quarter. Read against last year, though, the picture is more nuanced: Blinkit's Q3 FY24 result was a larger Rs. (56) crore loss (per the Q3 FY24 post), so this quarter's loss is actually smaller than a year ago even though it's worse than last quarter - Blinkit's year-over-year trajectory hasn't reversed, but its quarter-to-quarter momentum clearly did. Going-out had its first loss-making quarter since the segment was created, swinging from +Rs. 18 crore to Rs. (15) crore even as revenue grew fastest of all (+68.2% QoQ) - with no GOV or store data available this quarter, there's no way to tell whether that's aggressive new-market investment or a genuine cost problem. All other segments stayed immaterial.

Beyond the Usual

This quarter's only sourced document is the bare regulatory XBRL numeric filing - even barer than last quarter's, which at least disclosed a balance sheet and a half-year cumulative cash-flow statement. This filing has neither, and no qualitative notes beyond a one-line EPS disclaimer and the standard Ind AS 108 segment-disclosure note. That leaves genuinely little to footnote-mine this quarter.

The GST and subsidiary-audit-scope threads still can't be checked, for a second straight quarter

Every quarter since the FY24 year-end filing, this series tracked two live threads through Deloitte's bundled review report: the Rs. 420 crore GST show-cause-notice dispute over historical delivery charges, and the shrinking "entities not reviewed by their auditors" disclosure. Neither could be checked last quarter because no qualitative review-report text was filed, and the same is true again this quarter - this filing carries no auditor's report language at all. Two straight quarters without any visibility into either thread is now a real gap in this series' ability to track them, not a one-off. Both should be re-checked the moment a fuller filing (the FY25 year-end, most likely) becomes available.

Disclosure got thinner still - no balance sheet or cash-flow statement at all this quarter

Last quarter's filing at least disclosed a full balance sheet and a half-year cumulative cash-flow statement. This quarter's filing has neither - no cash balance, no total assets or liabilities, no operating/investing/financing cash-flow lines of any kind. That's a genuine step down from the equivalent quarter a year earlier: both the Q3 FY23 and Q3 FY24 filings disclosed nine-month cumulative cash flow and balance-sheet figures voluntarily, even though Ind AS doesn't strictly require either outside the half-year and year-end filings. Whether this is a one-off gap in what reached this series' source or a genuine reduction in voluntary interim disclosure is worth watching over the next couple of quarters - two consecutive quarters of thinner-than-precedent disclosure is starting to look like a pattern rather than noise.

The filing genuinely has no lease, purchase-commitment, related-party, or contingent-liability notes to mine this quarter - unlike a real quarterly or annual report, this bare numeric filing doesn't contain those disclosures at all, so no green findings are forced here.

Target Valuation Range

Eternal is trading at roughly Rs. 2,51,889 crore market cap - 11.65x annualized and 14.0x TTM statutory revenue (no EV estimate possible this quarter, with no balance sheet disclosed), down slightly from 12.4x/15.0x last quarter. Profit before tax was cut nearly in half this quarter, and the stock barely reacted - a genuinely calm market reaction to a real operating slip, not just a tax-driven wobble like last quarter.

Zomato's shares (still trading under that name at the time; the company would not rename to Eternal until March 2025) closed at Rs. 278.05 on December 31, 2024, up a modest 1.9% from the Rs. 273.30 close at the end of Q2 FY25 (no stock split has occurred between this quarter and today, so this is a like-for-like nominal comparison, not split-adjusted). That modest quarter-end number hides real intra-quarter volatility: the stock fell to Rs. 241.75 by end-October before rallying to Rs. 279.76 by end-November and settling back to Rs. 278.05 - a round trip of roughly 16% within the quarter itself.

Market cap buildup	Q2 FY25	Q3 FY25
Share price (period-end)	Rs. 273.30	Rs. 278.05
Shares outstanding (paid-up capital implied)	~872 crore	~906 crore
Market capitalization	Rs. 2,38,378 crore	Rs. 2,51,889 crore ($29.36B)

Share count rose 3.9% sequentially - a faster pace of ESOP-driven dilution than last quarter's 0.2%. With no balance sheet disclosed this quarter (see Beyond the Usual), there's no cash or investments figure to net out for an enterprise-value estimate this time - unlike every prior quarter in this series.

The peer-multiples sanity check remains the only workable method - there's still no comparably-sized listed pure-play Indian food-delivery-plus-quick-commerce peer, and no Adjusted Revenue figure exists this quarter to build the management-non-GAAP multiple used in earlier posts.

Peer-multiple sanity check	Q2 FY25	Q3 FY25
Statutory revenue (annualized)	Rs. 19,196 crore	Rs. 21,620 crore
Statutory revenue (TTM)	Rs. 15,855 crore	Rs. 17,972 crore
P/S (annualized quarter revenue)	12.4x	11.65x
P/S (TTM revenue)	15.0x	14.0x

Both multiples compressed slightly this quarter - the opposite of the last several quarters' pattern - purely because revenue grew faster (+12.6% QoQ) than the share price (+1.9% QoQ), not because the market judged the business more cautiously. That's a genuinely different dynamic from a quarter where profit before tax was cut nearly in half: on a pure price-to-sales basis the stock actually got cheaper, even as the more profit-sensitive part of the story (see Key Financial Metrics) kept deteriorating - a disconnect worth watching, since a P/S multiple says nothing about whether that revenue is converting to profit.

A real discounted-cash-flow model remains out of reach, and more definitively than in either of the last two quarters - there is no cash-flow data of any kind in this filing to build one from, not even a derivable estimate. The peer-multiple read above, thin as it is, is the only valuation method this quarter's source document actually supports.

---