Zomato Q2 FY24 Results: Posting a surprise profit for a second consecutive quarter, online food delivery platform Zomato on Friday reported a net profit of Rs 36 crore for the September 2023 quarter (Q2 FY24). Its revenue from operations during July-September 2023 stood at Rs 2,848 crore, a 72 per cent jump as against Rs 1,661 crore in the year-ago period.
Zomato had posted a loss of Rs 302 crore in the corresponding quarter last year. In the previous quarter ended June 2023, the company had reported its first-ever profit of Rs 2 crore.
Demand for online food ordering in India has grown in recent years, prompting delivery services providers such as Zomato and rival Swiggy to expand to smaller towns. Zomato has been building its dining-out business – which offers online table booking and discounts at select restaurants – along with events and ticketing platforms, while opening more Blinkit grocery stores.
The efforts helped its revenue from operations, which still mostly comes from its mainstay food delivery business and related fees it charges customers and restaurants, rise over 71 per cent to 28.48 billion rupees.
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 Rs 1,59,45,300) 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 Rs 41 crore as compared to Rs 12 crore profit in the previous quarter (Q1FY24) and a loss of Rs 192 crore last year same quarter (Q2FY23),” he added.
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 Rs 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”.
Shares of Zomato on Friday jumped Rs 8.90 or 8.28 per cent higher to close at Rs 116.4 apiece on the BSE.
(With Inputs from Agencies)
