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Zomato Q3 results: Net profit rises 283% to Rs 138 crore, revenue up 69%

The company reported a loss of Rs 347 crore during the corresponding period last year. The results were also ahead of analyst expectations on both revenue and net profit fronts

Zomato is now allowing its users to build multiple carts at one time

According to Bloomberg, analysts had pegged Zomato’s revenue at Rs 3,100 crore and net profit at Rs 84.54 crore for Q3FY24

Aryaman Gupta New Delhi
Food aggregator platform Zomato reported its third consecutive quarter of consolidated net profit at Rs 138 crore in the third quarter (Q3) of 2023-24 (FY24), up from Rs 36 crore a quarter ago. The company reported a loss of Rs 347 crore during the corresponding period last year. The results were also ahead of analyst expectations on both revenue and net profit fronts.

Zomato’s revenue from operations rose 69 per cent year-on-year (Y-o-Y) to Rs 3,288 crore in Q3, up from Rs 1,948 crore a year ago. It had reported revenue of Rs 2,848 crore in the previous quarter.

Total expenses for the Gurugram-based food delivery firm increased to Rs 3,383 crore in the quarter ended September, up from Rs 3,039 crore a quarter ago and Rs 2,485 crore a year ago.

Zomato’s adjusted earnings before interest, tax, depreciation, and amortisation (Ebitda), including its quick-commerce business Blinkit, were positive for the third quarter in a row at Rs 125 crore, compared to Rs 41 crore in the second quarter (Q2) of FY24.

According to Bloomberg, analysts had pegged Zomato’s revenue at Rs 3,100 crore and net profit at Rs 84.54 crore for Q3FY24. The results were announced a little ahead of market closing.

Zomato’s share price closed at Rs 144 on the BSE, up 2.42 per cent over the previous day’s closing, even as leading indices fell by 1 per cent on Thursday.

The company ended the quarter with a closing cash balance of Rs 12,015 crore, up from Rs 11,761 crore a quarter ago.

The gross order value (GOV) across Zomato’s business-to-consumer businesses, including food delivery, quick commerce, and going-out, grew 13 per cent quarter-on-quarter (Q-o-Q) and 47 per cent Y-o-Y to Rs 12,886 crore.

“Our consolidated top line (adjusted revenue) continues to grow meaningfully above our stated expectation of over 40 per cent Y-o-Y. At this point, we expect the top line to continue growing at over 50 per cent Y-o-Y,” said Deepinder Goyal, founder and chief executive officer (CEO), Zomato, in a letter to shareholders.

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Food delivery

Adjusted revenue for its food delivery business increased to Rs 2,025 crore in Q3, up from Rs 1,925 crore a quarter ago, and Rs 1,565 crore in the year-ago period.

GOV for Zomato’s food delivery business increased 6.3 per cent Q-o-Q to Rs 8,486 crore in Q3 from Rs 7,980 crore in Q2. On a yearly basis, GOV increased 27 per cent Y-o-Y from Rs 6,680 crore in Q3 of 2022-23.

“The demand environment was muted in the last quarter (Q3FY24) and that is true even for the broader restaurant industry. Hence, food delivery GOV growth was lower than our expectations but still higher than some of the other players in the restaurant industry space,” said Rakesh Ranjan, CEO of Zomato’s food ordering and delivery business.

The company’s subscription programme Zomato Gold, Ranjan said, is being used “tactically to acquire (and re-acquire) customers and hence we have to remain competitive on pricing”.

Improvements in the platform’s ad monetisation have led to consistent Q-o-Q increases in ad revenue per order over the past several quarters, while the introduction of a platform fee for all customers, including Gold members, in July 2023 also helped in margin improvement.

Whether the company plans to increase its contentious platform fee further remains to be seen.

“Much like the Gold programme, we are still testing the waters on what works and makes sense here from a long-term perspective. We will continue to tactically use levers like these to optimise both growth and margin expansion,” Ranjan said.

Blinkit

The firm’s quick-commerce arm Blinkit saw its revenue increase to Rs 644 crore in the October-December quarter from Rs 505 crore in the previous quarter, while its GOV for the quarter was reported to be Rs 3,542 crore, compared to Rs 2,760 crore a quarter ago.

“In line with our expectations, GOV grew 28 per cent Q-o-Q (103 per cent Y-o-Y) largely driven by the robust uptick in demand that we witnessed due to multiple festivals and occasions in the quarter,” said Blinkit CEO Albinder Dhindsa.

Blinkit’s average order value stood at Rs 635 versus Rs 607 in Q2. Its dark store count also increased Q-o-Q from 411 to 451.

Blinkit operates in 15 cities in India. While most of the GOV growth was order volume-led, part of it was also driven by an increase in average order value, which continued to benefit from a higher mix of high average selling price categories such as electronics, festival needs, home décor, among others.

Hyperpure

Its business-to-business vertical, Hyperpure, saw its revenue rise to Rs 859 crore compared to Rs 745 crore a quarter ago and Rs 421 crore a year ago.

According to Goyal, this was driven by growth in both the core restaurant supplies business and the relatively newer quick-commerce opportunity. Meanwhile, the vertical’s adjusted Ebitda loss remained flat at Rs 34 crore in Q3.

“To address a growing need of our restaurant partners, we are now setting up a plant for processing value-added food supplies including sauces, spreads, pre-cut and semi-finished perishable products, among others. Over time, this has the potential to expand margins and drive higher engagement with our restaurant partners,” Goyal said.

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First Published: Feb 08 2024 | 7:32 PM IST

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