Zomato shares plunged 9% in early trade on the BSE, hitting their day's low of Rs 219 on Tuesday, January 21, after the food delivery company reported a 57% decline in its consolidated net profit for the December quarter, at Rs 59 crore, compared to Rs 138 crore in the same period last year.

The revenue from operations in Q3FY25 stood at Rs 5,405 crore, which was up by 64% over Rs 3,288 crore in the corresponding quarter of the previous financial year.

On a sequential basis, the profit after tax (PAT) was down by 66% over Rs 176 crore reported in Q2FY25. Meanwhile, the topline was higher by 13% on a sequential basis versus Rs 4,799 crore reported in the July-September quarter.

Zomato's gross order value or GOV of the B2C businesses grew 57% YoY while rising by 14% QoQ to Rs 20,206 crore in Q3FY25.

Zomato in its letter to the shareholders said that it was currently going through a broad-based slowdown in demand which started during the second half of November.

Should you buy, sell, or hold Zomato's stock? Here's what analysts say:

UBS

UBS maintained its 'Buy' rating on Zomato, setting a target price of Rs 320.

The company reported overall decent results, though there was a surprising slowdown in food delivery. However, this was offset by positive margin expansion. Additionally, Zomato has accelerated its dark store rollout, now targeting 2,000 stores by December 2025, a year earlier than the previously set goal of December 2026.

Nomura

Nomura has maintained its 'Buy' rating on Zomato, but revised the target price to Rs 290 from the previous Rs 320.

The report highlights lower near-term profitability in the Quick Commerce segment. Despite a slowdown in food delivery, the segment has shown surprising profitability. The Quick Commerce segment has also advanced its store opening targets by a year. Nomura points out that strong execution and a robust balance sheet are key positives for Zomato.

Macquarie

Macquarie maintained an 'Underperform' rating on Zomato, with a target price of Rs 130.

The report notes that competitive intensity is impacting profitability and that Blinkit is expected to experience a prolonged period of negative margins. Macquarie sees a limited margin of safety for the company. Additionally, food delivery is expected to see a mild downside, with a projected 20% GOV CAGR for FY26-28.

BofA

BofA reiterated a 'Buy' rating on Zomato, with a target price of Rs 375.

Zomato's Q3 numbers missed consensus estimates on EBITDA and EPS. Blinkit's adjusted EBITDA loss stood at Rs 103 crore, with management attributing the higher losses to faster expansion. The company expects Blinkit's losses to continue for the next 1-2 quarters but anticipates more than 100% GOV growth for FY25 and FY26. Additionally, food revenue growth at 17% was lower than estimated.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)