Zomato's Market Turmoil Continues

In a startling turn of events, Zomato's shares experienced a significant drop for the second consecutive day, plummeting by 12% in morning trade on Tuesday. This sharp decline follows the company's report of a 57.2% decrease in consolidated net profit for the December quarter, amounting to Rs 59 crore.

Market Reaction and Competitor Impact

The ripple effect of Zomato's financial woes was felt across the market, with shares of its competitor, Swiggy, also declining by over 10%. This marks the most significant single-day drop for Swiggy since its listing last year. Meanwhile, the broader market indices, BSE Sensex and NSE Nifty, also witnessed downturns, reflecting the overall market sentiment.

Behind the Numbers

Zomato's aggressive expansion strategy, particularly in its quick-commerce platform Blinkit, has put pressure on its margins. Despite a rise in consolidated revenue from operations to Rs 5,405 crore, up from Rs 3,288 crore in the previous year, the company's total expenses surged to Rs 5,533 crore. This financial strain highlights the challenges Zomato faces in balancing growth with profitability.