Zomato net loss narrows to Rs 251 crore in Q2, revenue jumps 62%

This is the first quarter where the food aggregator crossed the billion-dollar mark in annualized revenue, Zomato revealed

Food delivery aggregator Zomato's net loss narrowed to Rs 251 crore for the September quarter, compared to Rs 429.6 crore in the corresponding period of the previous financial year.

The company also revealed this is the first quarter where they crossed the billion-dollar mark in annualised revenue.

The revenue increased 62.2 per cent to Rs 1,661 crore as against Rs 1,024 crore during the year-ago period.

The total adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) loss increased to Rs 192 crore in Q2FY23 compared to Rs 150 crore in Q1FY23. Adjusted Ebitda loss was Rs 60 crore for the quarter.

The company, in its release, stated that its acquisition of Blinkit closed on August 10 earlier this year. Hence, this quarter includes 50 days of Blinkit financials in the consolidated numbers. The total adjusted revenue grew 48 per cent year-on-year (YoY) to Rs 2,170 crore. This translates to an annualised revenue of $1.05 billion.

On future growth, co-founder and chief executive officer (CEO) Deepinder Goyal, said: "The restaurant and food delivery industry in India is still nascent and we need to relentlessly execute to tap into the large opportunity. I don’t want macro headwinds to be an excuse for us to innovate less."

He further added that there are a number of areas where the company should improve. "We should do more with less, ship higher quality products faster, listen to our customers better and engage with our restaurant partners and delivery partners for feedback more often. We should take more multiplier risks and challenge existing paradigms," he said.

For Zomato’s food delivery business, growth in the gross order value (GOV) was 3 per cent quarter-on-quarter (QoQ) and 23 per cent YoY, driven by growth in order volumes and average order value. Growth in revenue per order led to a higher adjusted revenue growth for food delivery of 8 per cent QoQ and 27 per cent YoY.

The contribution margin as a percentage of the gross order value (GOV) for the food aggregator grew to 4.5 per cent in Q2FY23, compared to 2.8 per cent in Q1 and 1.2 per cent in Q2FY22.  

“The increase in contribution margin is driven by improvements on both cost and revenue side. This has been the result of scale and heightened focus on profitability over the last few quarters. In our view, none of these improvements in contribution margin is temporary in nature,” said Akshant Goyal, Chief Financial Officer, Zomato.

Blinkit’s GOV grew 26 per cent QoQ to Rs 1,482 crore while revenue grew 44 per cent QoQ. Adjusted Ebitda loss in quick commerce reduced to Rs 259 crore in Q2 from Rs 326 crore in Q1, leading to an adjusted Ebitda as a percentage of GOV of -17.5 per cent in Q2FY23 as against -27.8 per cent in the previous quarter.