Zomato’s Q2 Profit Declines 30% QoQ To INR 176 Cr

Foodtech major Zomato’s consolidated net profit slumped 30% to INR 176 Cr in the September quarter (Q2) of the financial year 2024-25 (FY25) from INR 253 Cr posted in the preceding June quarter, hurt by a surge in certain expense buckets.

The company also had to pay INR 76 Cr as current tax during the quarter, which also impacted its bottom line.

Zomato, which has been seeing a steady growth in its PAT since Q1 FY24, saw a slump in its bottom line in Q2 even as its operating revenue grew more than 14% to INR 4,799 Cr in the reported quarter from INR 4,206 Cr in Q1 FY25.

On a year-on-year (YoY) basis, Zomato’s operating revenue jumped 68.5% from INR 2,848 Cr in the September quarter of the previous fiscal and PAT jumped 389% from INR 36 Cr.

Meanwhile, Zomato continued to see strong growth across verticals. Food delivery’s gross order value (GOV) rose 5% to INR 9,690 Cr in Q2 FY25 from INR 9,264 Cr in the preceding June quarter.

Quick commerce business Blinkit’s GOV surged 25% QoQ to INR 6,132 Cr.

Amid the company’s increased focus on its going out business, the vertical saw the biggest jump of 46% quarter-on-quarter (QoQ) in GOV to INR 1,849 Cr. It is pertinent to note that during the quarter, Zomato acquired Paytm’s events and movie ticketing business. 

The company said that due to this acquisition, the numbers for Q2 FY25 are not directly comparable with previous quarters. The like-for-like GOV growth (excluding the impact of the acquired business) was 29% QoQ in Q2 FY25.

Overall, Zomato’s B2C business’ GOV increased 14% QoQ to INR 17,670 Cr in the reported quarter. 

In a further push to its going-out business, Zomato is planning to launch its new app District within the next four weeks.

Meanwhile, the company also received the approval from its board to raise up to INR 8,500 Cr (about $1 Bn) via qualified institutional placement (QIP). 

Speaking on further fundraising plans, Zomato CEO Deepinder Goyal said, “While the business is now generating cash (vis-a-vis a loss making business at the time of IPO), we believe that we need to enhance our cash balance given the competitive landscape and the much larger scale of our business today.”

At the end of Q2 FY25, Zomato had a cash balance of INR 10,813 Cr as against INR 12,539 Cr at the end of the June quarter, which the company attributed to the acquisition of Paytm’s ticketing business.

Zooming Into Expenses

Zomato’s total expenses increased about 14% to INR 4,783 Cr in Q2 FY25 from INR 4,203 Cr in the previous quarter, with delivery and related charges continuing to remain the biggest expense head.

Its total expenses jumped over 57% from INR 3,039 Cr reported in the corresponding quarter of the previous year.

Delivery & Related Charges: Zomato spent INR 1,398 Cr under this head during the quarter as against INR 1,328 Cr in Q1 FY25. 

The company saw a 52% jump in this bucket on a YoY basis.

Purchases Of Stock In Trade: Zomato’s expenses here grew to INR 1,369 Cr, registering about a 23% QoQ increase and 100% YoY rise.

Employee Cost: Total employee benefit expenses grew 11.5% QoQ to INR 590 Cr in Q2 FY5.

It also saw a 41.4% jump under this expense head from INR 417 Cr in Q2 FY24.

Ad & Sales: The foodtech and quick commerce major continued to ramp up its advertisement and promotion during the quarter, which increased the spending under the head 6.3% QoQ to INR 421 Cr in Q2 FY25.

Ahead of its Q2 earnings, shares of Zomato ended Tuesday’s trading session 3.6% lower at INR 256.2 on the BSE.