Zomato Q2 Result: Net profit at ₹36 crore, revenue rises 72%, stock surges 7%

Online food delivery platform Zomato on Friday reported a consolidated profit after tax of 36 crore for the second quarter ended September 2023, driven by strong revenue growth.

Food delivery company Zomato as seen on its app(REUTERS)
Food delivery company Zomato as seen on its app(REUTERS)

The company had reported a loss of 251 crore for the corresponding quarter of the previous financial year.

Revenue from operations was 2,848 crore in the quarter. In the year-ago period, it was 1,661 crore.

Total expenses were 3,039 crore in the quarter under review. In the year-ago quarter, it stood at 2,092 crore, according to a regulatory filing.

The company also announced that its board has approved sale of entire voting rights constituting 30 per cent in ZMT Europe LDA, an associate company located in Portugal, for an aggregate sale consideration of 1.80 lakh euros (approx 1,59,45,300)

READ | Zomato reports first-ever quarterly profit, shares surge 14%

In a letter to shareholders, the company informed that its quick commerce business (Blinkit) has turned contribution positive for the first time, for the entire quarter.

The contribution margin as a percentage of gross order value (GOV) in the business improved from -7.3 per cent in Q2FY23 last year (when it acquired the business) to 1.3 per cent now in Q2FY24.

“The growth momentum we witnessed in Q1FY24 continued in Q2FY24 driven by healthy growth across all our businesses,” Founder and CEO Deepinder Goyal said.

“On the profitability front, we posted a second consecutive profitable quarter with Adjusted EBITDA of 41 crore as compared to 12 crore profit in the previous quarter (Q1FY24) and a loss of 192 crore last year same quarter (Q2FY23),” he added.

READ | Zomato launches ‘Xtreme,’ an intra-city logistics service for merchants: All you need to know

Earnings Before Interest, Taxes, Depreciation, and Amortisation, or EBITDA, is a statistic used to assess a company’s operating performance.

Zomato CFO Akshant Goyal said, “On balance, we think that QoQ GOV growth in food delivery in the next quarter should be moderate – around high single digit which should translate to about 25-30 per cent YoY GOV growth.

Commenting on the newly introduced platform fee, Akshant said: “Starting Q2FY24, customers are being charged a nominal platform fee (in the range of 2-5 per order) on every order, including those of Zomato Gold members. It is a small fee to make our economics better and viable in the long run. We make sure we keep our service affordable for our customers at all times”.

Blinkit Founder Albinder Dhindsa said on a YoY basis, the GOV growth (for Blinkit) was 86 per cent, as expected and in line with the past.

“GOV growth was largely driven by same store sales growth as we continue to focus on serving more customer needs and ensuring consistency of service levels. We also saw a net addition of 28 new stores during the quarter, taking our overall store count to 411 stores at the end of the quarter,” he added.

Commenting on Blinkit, Akshant said: “We have also seen festivals driving much stronger growth for quick commerce as compared to food delivery. With major festivals like Navratri, Dussehra, Diwali etc. lined up in the December quarter, we expect another high growth quarter from Blinkit”.

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