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Zomato Shares Decline 6% After Q4 Results

Zomato Shares Decline 6% After Q4 Results
SUMMARY

At 12:05 PM on Tuesday, Zomato shares were trading at INR 189.40, as compared to INR 193.70 at previous close

Zomato’s consolidated profit after tax (PAT) zoomed 26.8% to INR 175 Cr in Q4FY23 from INR 138 Cr

However, Zomato saw a decline in the GOV of its food delivery business on a QoQ basis

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Despite posting higher profits quarter-on-quarter for Q4 FY24, Zomato shares slipped by 6% to INR 182.10 on Tuesday (May 14).

At 12:20 PM on Tuesday, Zomato was trading at INR 189.20 per share, as compared to INR 193.70 at close the previous day.

The fall could be attributed to broader concerns stemming from the 2024 general elections. Uncertainty about the election outcome has triggered market volatility, leading to a slump in equity markets.

There is also a possibility many investors might be rejigging their holdings in Zomato to book profits after the quarterly financial update.

The company announced that it would be investing heavily in the quick commerce business Blinkit, and nearly double its store count by the end of FY25. This aggressive expansion is also likely to have tempered investor expectations around future growth in profits. 

Zomato’s consolidated net profit zoomed 26.8% to INR 175 Cr in Q4FY23 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.

However, 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.

Quick commerce arm 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.

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.

Blinkit’s GOV or gross order value soared 97% year-on-year (YoY) to INR 4,027 Cr in the quarter ended March 2024.

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.

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