Home / Companies / Company Results /  Zomato Q1 results: Consolidated loss narrows to 186 cr, revenue rises over 67%
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Online food delivery platform Zomato narrowed its consolidated loss to 185.7 crore in the quarter ending June 30, 2022 (Q1FY23) period compared to a loss of 356.2 crore in the same quarter last year. The company had posted a loss of 359.7 crore in the preceding quarter. These losses were attributable to the owners of the company. The top-line front lifted the overall financial performance in Q1. Consolidated revenue stood at 1,413.9 crore in Q1FY23 rising by a whopping 67.44% from 844.4 crore in Q1 of last year and also increased by 16.68% from 1,211.8 crore in Q4FY22.

On the top-line front, Akshant Goyal the Chief Financial Officer of Zomato said, "Growth in revenue was driven by a) ~10% QoQ growth in Gross Order Value (“GOV") to 64.3 billion in Q1FY23 and b) growth in revenue per order. GOV growth was in turn driven by robust growth in order volumes and mild growth in average order values as compared to the previous quarter."

The company recovered losses in the food delivery business. Overall, adjusted loss in EBITDA narrowed to 150 crore in Q1FY23 versus 220 crore in Q14FY22 and 170 crore in Q1FY22.

Akshant added, "On the profitability front, the food delivery business hit an important milestone last quarter by getting to Adjusted EBITDA break-even. Contribution as a % of GOV increased to 2.8% in Q1FY23 as compared to 1.7% in Q4FY22 driven by improvements on both cost and revenue side, as we had indicated in the past."

Deepinder Goyal founder and CEO of Zomato said, "The real driver here is focus and mindset. Our focus on profitability has sharpened over the past few months with the change in market context, without compromising our focus on growth. We are doing that by assessing everything with a critical lens and allocating resources by taking a long-term view to sustainable growth, as well as profit."

Deepinder expects monthly transacting customers likely to drive the growth of the company. He said, "If you compare Q1FY23 with Q1FY22, average monthly transacting customers have increased by 36% while the average monthly order frequency has also increased by 10% in the same period," adding, "Growth in monthly transacting customers will be a function of higher repeat rate of the existing customer base of Zomato (50+ million annual transacting customers in FY22) and new customer addition which remains robust."

The CEO further expects hyperpure to become a much larger business than just supplying to restaurants. He said, " Food and supplies cost is typically 25-30% of a restaurant’s revenue. Broadly speaking, that means that Hyperpure's addressable market also is about 25-30% of restaurant food consumption in India. Even if we restrict our presence to the top 20 cities here, that translates into a very large addressable market."

"Also, as we go along, Hyperpure could become a much larger business than just supplying to restaurants. As we expand into quick commerce, the capabilities we have built in Hyperpure will also come in handy. Hence, there is a long runway for growth here," Deepinder added.

Further, Akshant believes Zomato could get o 5-10% EBITDA margins in a steady state in hyperpure business. He said, "Our more mature cities like Bangalore are already trending towards EBITDA break-even. We expect continued improvement in margins owing to economies of scale, operating leverage, and improvement in gross margins."

Giving an update on the deal with Blinkit, Akshant said, "We have received the shareholders’ approval for the transaction. 97%+ votes were in favor of the transaction. We are now awaiting approval from stock exchanges. The financials of Blinkit will start getting consolidated into Zomato’s consolidated financials post the closing."

On BSE, Zomato shares closed at 46.35 apiece down by 1.07%. The company's market cap is around 36,494.39 crore.


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