Zomato Q1: Profit Surges Multifold To INR 253 Cr, Revenue Up 74% YoY

Foodtech major Zomato’s consolidated net profit zoomed multifold year-on-year (YoY) to INR 253 Cr in the June quarter (Q1) of the financial year 2024-25 (FY25). The Deepinder Goyal-led startup posted its maiden profitable quarter in Q1 FY24, reporting a net profit of INR 2 Cr.

With Blinkit continuing to lead the show, Zomato’s profit also rose nearly 45% from INR 175 Cr on a quarter-on-quarter (QoQ) basis.

Zomato’s revenue from operations jumped 74% to INR 4,206 Cr in Q1 FY25 from INR 2,416 Cr in the corresponding quarter last year. Operating revenue rose 18% from INR 3,562 Cr in Q4 FY24.

Blinkit witnessed a massive 145% jump YoY and a 22.5% rise QoQ in its revenue to INR 942 Cr in the reported quarter. 

The quick commerce vertical’s gross order value (GOV) stood at INR 4,923 Cr in Q1 FY25, growing over 2X YoY.

On the other hand, Zomato’s core food delivery vertical continued to show a moderate growth. Its adjusted revenue increased 30% YoY and 10% QoQ to INR 2,256 Cr in Q1.

The food delivery vertical’s GOV stood at INR 9,264 Cr in the June quarter as against INR 7,318 in the year-ago period, registering a 27% rise YoY.

Commenting on Zomato Gold membership, the company said during its earnings call on Thursday (August 1) that the programme has matured in terms of size and is increasing month-on-month. Currently, almost half of the company’s food delivery GOV comes from the Gold members, it reiterated.

Overall, the GOV of Zomato’s B2C business jumped 53% YoY to 15,455 Cr in Q1 FY25.

Commenting on the results, Zomato CEO Deepinder Goyal said, “Today, Zomato and Blinkit are our two large consumer businesses and both of them serve customers’ needs at home. However, we also have one of India’s largest ‘going-out businesses… This dining-out business is now operating at a run-rate of $500 Mn+ annualised GOV and is already profitable.”

“We believe that there is an opportunity to further expand our going-out offering, building on top of our dining-out business. Additional use cases for customers in the going out space include – movies, sports ticketing, live performances, shopping, staycations etc., some of which we have already launched, or are building as we speak,” he said.

Besides, after giving a teaser of its new initiative called ‘District’ on social media platforms, Goyal stated that Zomato is building a one-stop destination app for going-out business – District (by Zomato). 

“If we execute this well, we see going-out becoming the 3rd large B2C business emerging out of Zomato,” he added.

The foodtech major’s going-out business’ GOV jumped 106% YoY to INR 1,268 Cr in Q1 FY25.

Zomato’s B2B business Hyperpure’s revenue jumped 96% YoY to INR 1,212 Cr in Q1.

Zooming Into Expenses 

Total expenses jumped 61% to INR 4,203 Cr during the quarter under review from INR 2,612 Cr in Q1 FY24, with delivery and related charges single-handedly contributing over 31% to the total spending during the quarter.

Delivery & Related Charges: The company’s total expense in this bucket increased to INR 1,328 Cr in the reported quarter from INR 810 Cr in the year-ago period.

Purchases Of Stock-in-Trade: In line with its expanding business, Zomato’s spending under this head doubled to INR 1,116 Cr in Q1 FY25 from INR 557 Cr in the corresponding quarter of last fiscal.

Employee Cost: Zomato spent INR 529 Cr on employee benefit expenses in the reported quarter, which grew 56.5% from INR 338 Cr in Q1 FY24.

Meanwhile, the company reiterated that despite the expected increase in both the ESOP charge and the cash employee expenses, it expects total employee cost (including cash expense and non-cash ESOP charge) as a percentage of adjusted revenue to continue trending downwards in FY25 and beyond.

At a time when multiple stage governments are working to provide social security to gig workers, Zomato said during the earnings call that the exact impact of such measures on the company is not clear.

“Different states are taking different views on how these welfare benefits should be administered and the exact impact on our P&L is not clear at this point. But we don’t expect the impact to be very meaningful on P&L at this point, we don’t expect it to impact our margins. We should be able to absorb this in our business, or even pass it on to the customers,” Zomato said.

Ad Expenses: Zomato saw a 26% YoY rise in its advertising and sales promotion expenditure to INR 396 Cr in Q1.

Shares of Zomato were trading 2.85% higher at INR 236.05 on the BSE at 03:25 PM, soon after the earnings announcement. They later shed some gains to end today’s session 2% higher at INR 234.1.