The number of restaurants active on Zomato fell for the first time on record in the June quarter, as a months-long squeeze on commercial cooking gas forced kitchens across India to ration operations, cut menus, or shut altogether.
Eternal’s food delivery platform ended the quarter with about 328,000 average monthly active restaurant partners, down from 344,000 in the March quarter, according to its Q1FY27 disclosures. It was the first sequential fall in the metric in the company’s disclosed history, which had climbed steadily from 313,000 a year earlier. Chief executive Albinder Singh Dhindsa told analysts the decline reflected restaurants going offline because of the LPG situation during the quarter, rather than any deliberate pruning of the platform.
Import Disruption
The disruption began in the final weeks of March, when the closure of the Strait of Hormuz amid the conflict in West Asia choked India’s LPG imports and a government order directed oil marketing companies to prioritise households over commercial users. Commercial supply to restaurants was cut sharply, restored only in stages through the following months, with sectoral restrictions lifted fully only in late June. For most of the June quarter, restaurants ran on rationed and costlier gas.
Prices climbed alongside the shortage and have stayed high. A 19-kg commercial cylinder, the size restaurants use, rose steeply through the first half of 2026, with the single largest increase coming in May, after the acute supply squeeze had begun to ease. A first price cut of the year in July brought only partial relief, leaving cylinders well above where they stood in January. Prices have still not recovered to pre-war levels.
The burden fell hardest on the smallest kitchens. Industry bodies said during the crisis that around a fifth of restaurants had curtailed operations at its peak, and that small and mid-sized eateries, which run on the thinnest margins and the smallest gas reserves, were the most exposed. For many such outlets, weeks of lost trade followed by a permanently higher fuel bill can be the difference between a temporary shutdown and a permanent one. Larger chains, which had built gas buffers and could shift some cooking to electric, were better placed to ride it out.
The fall in restaurant partners came even as Zomato’s food delivery business grew net order value 20.1% year-on-year to Rs 10,769 crore and lifted monthly transacting customers to 27.2 million. A shrinking supplier base alongside a growing customer base is unusual for the platform, and points to stress on the supply side rather than any softening of demand.
