Zomato Q4: Net Profit Surges 27% QoQ To INR 175 Cr

Zomato Q4: Net Profit Surges 27% QoQ To INR 175 Cr

SUMMARY

Zomato posted a net loss of INR 187.6 Cr in Q4 FY23 while its net profit stood at INR 138 Cr in Q3 FY24

Operating revenue jumped to INR 3,562 Cr in Q4 FY24 from INR 3,288 Cr in Q3 FY24

The company also said that its quick-commerce vertical Blinked turned adjusted EBITDA positive in the month of March 2024

Foodtech major zomato’s consolidated profit after tax (PAT) zoomed 26.8% to INR 175 Cr in the quarter ended March 31 (Q4) of the financial year 2023-24 (FY24) from INR 138 Cr in the preceding quarter. 

The company had posted a net loss of INR 187.6 Cr in the same quarter of the previous fiscal.

Q4 was the fourth consecutive profitable quarter for the foodtech giant. Zomato posted a net profit of INR 36 Cr in Q2 FY24 and INR 2 Cr in Q1. 

The company’s adjusted EBITDA stood at INR 194 Cr in Q4 FY24 as against an adjusted EBITDA loss of INR 175 Cr in the year-ago quarter. 

In tandem with the increasing profits, Zomato’s operating revenue jumped over 8% to INR 3,562 Cr in Q4 FY24 from INR 3,288 Cr in Q3 FY24. The number was also 73% higher from the operating revenue of INR 2,056 Cr it posted in Q4 FY23. 

Meanwhile, total expenses for the quarter zoomed 7% to INR 3,636 Cr from INR 3,383 Cr in the preceding Q3. 

For the entire fiscal year FY24, Zomato’s PAT stood at INR 351 Cr as against a loss of INR 971 Cr in FY23. Its operating revenue for FY24 increased 67% to INR 12,114 Cr from INR 7,079 Cr in the previous fiscal year.  

The uptick in Zomato’s financials can be attributed to improving gross order value (GOVs) across B2C businesses. Combined GOVs of Zomato’s flagship food delivery business, quick commerce arm Blinkit, and Going-out businesses increased 51% year-on-year (YoY) and 5% quarter-on-quarter (QoQ) to INR 13,536 Cr.

Blinkit Becomes Adjusted EBITDA Positive In March

Zomato said that Blinkit turned adjusted EBITDA positive in the month of March 2024. Its gross order value (GOV) for the quarter registered a 97% YoY and 14% QoQ growth to INR 4,027 Cr. The quick commerce arm’s operating revenue zoomed 112% YoY and 19% QoQ to INR 769 Cr. 

Meanwhile, Blinkit’s adjusted EBITDA loss improved to INR 37 Cr in Q4 FY24 from INR 203 Cr a year ago and INR 89 Cr in the preceding December quarter.

“We are just grateful that the bet that we took on Blinkit worked out just fine… We are also grateful to our Board, for believing in the distant bet we were taking at that time, and helping us bring it all together quickly over the last few quarters,” CEO Deepinder Goyal said in the shareholder letter released along with the Q4 results. 

Explaining the roadmap for Blinkit’s growth, its CEO Albinder Dhindsa said that the Zomato subsidiary will be focusing on store expansion in the upcoming quarters. While Blinkit took its store count in India to 526 with the addition of 75 new stores during the quarter under review, it plans to add 100 more stores in the ongoing quarter (Q1 FY25). 

“At this point, we are aiming to get to 1,000 stores by the end of FY25. With this aggressive store expansion planned (almost 2x store count in 12 months), the overall adjusted EBITDA in our business is likely to hover around zero for the next few quarters. In steady state, we expect a 4-5% adjusted EBITDA margin (as a % of GOV),” Dhindsa said. 

Muted Growth For Food Delivery Business

Zomato saw a decline in the GOV of its food delivery business on a QoQ basis. Its GOV fell to INR 8,439 Cr during the quarter under review from INR 8,486 Cr in the previous quarter. However, GOV rose 28% on a YoY basis.

Meanwhile, average monthly transacting customers for the food delivery business rose to 19 Mn in Q4 from 18.8 Mn in the preceding quarter.

“I think customers value the convenience and predictability layer Zomato has built on top of the services offered by restaurants, which is why the growth of Zomato is a tad bit higher than that of the restaurant industry,” Goyal said.

The adjusted EBITDA for Zomato’s food delivery vertical also grew 9% QoQ to INR 275 Cr. 

Food ordering and delivery business CEO Rakesh Ranjan said that the business’ adjusted EBITDA margin improved by 2.1% points over the past four quarters. He attributed this improvement to higher average order value, improvements in take rate and ad monetisation, and the introduction of platform fee and cost efficiencies. 

“Together, these factors more than compensated for the lower customer delivery fee on account of the free delivery benefit on Gold orders,” Ranjan added.

It is pertinent to note that Zomato increased its platform fee to INR 4 per order across key markets from INR 3 earlier this year. 

Further, the company also registered a healthy growth in its B2B vertical, Hyperpure. Its revenue grew 11% to INR 951 Cr from the previous quarter’s INR 859 Cr. The company also managed to curtail the losses of Hyperpure. Its adjusted EBITDA loss stood at INR 23 Cr in the March quarter as against INR 34 Cr in the December quarter.

Meanwhile, Zomato will grant 18.26 Cr employee stock options under its Zomato ESOP 2024 plan, subject to the approval of the shareholders.

As per the stock’s last closing, the ESOP plan would translate to shares worth over INR 3,500 Cr. 

Meanwhile, the company’s subsidiary Zomato Payment Private Limited (ZPPL) has decided to voluntarily surrender the certificate of authorisation it obtained from the Reserve Bank of India (RBI) to operate as an online payment aggregator.

Shares of Zomato ended today’s trading session 3.82% lower at INR 193.70 on the BSE. 

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