Zomato Q3 Results: Net profit at ₹138 crore, revenue up 69% YoY; 5 key highlights | Mint
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Business News/ Companies / Company Results/  Zomato Q3 Results: Net profit at 138 crore, revenue up 69% YoY; 5 key highlights
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Zomato Q3 Results: Net profit at ₹138 crore, revenue up 69% YoY; 5 key highlights

Zomato Q3 Results: The online food delivery platform's revenue from operations in the third quarter of current fiscal came in at ₹3,288 crore, registering a growth of 69 per cent, compared to ₹1,948 crore in the year-ago period.

Kolkata Zomato delivery boys in Park street area. Photo by Indranil Bhoumik/mintPremium
Kolkata Zomato delivery boys in Park street area. Photo by Indranil Bhoumik/mint

Zomato Q3 Results: Zomato announced its October-December quarter results for fiscal 2023-24 (Q2FY24), reporting a consolidated net profit of 138 crore, compared to a net loss of 347 crore in the year-ago period. This is the third straight quarter. The online food delivery platform's revenue from operations in the third quarter of current fiscal came in at 3,288 crore, registering a growth of 69 per cent, compared to 1,948 crore in the year-ago period.

In a letter to shareholders, Zomato Managing Director & CEO Deepinder Goyal said in the third quarter, the food delivery gross order value (GOV) - the total value of all orders placed - reached back up to 25 per cent year-on-year (YoY).

"At this point, we expect GOV to continue growing at 20 per cent-plus YoY, and perhaps accelerate further if we see more than expected market share gains and revival in macro consumer demand," he added.

Also Read: Zomato Q3 results preview: Revenue likely to grow 61% YoY on food delivery, Blinkit

Here are 5 key highlights of Zomato's Q3 scorecard:
1.Operating numbers

The total expenses were higher at 3,383 crore, compared to 2,485 crore in the corresponding period a year ago, the company said. Revenue from its mainstay food delivery business grew 48 per cent for the quarter, while revenue from its quick commerce division more than doubled. Zomato's contribution margin - a key profit metric - expanded to 7.1 per cent from 6.6 per cent in the second quarter due to the introduction of a fee for customers to use the food delivery platform.

2.Blinkit scorecard

Zomato's GOV at Blinkit, its grocery delivery business, more than doubled, while its mainstay food delivery business grew 27 per cent for the quarter. On the company's quick commerce vertical Blinkit, Goyal said the GOV growth was at 103 per cent YoY and "continues unabated", while losses continue to decline.

Blinkit Founder & CEO Albinder Dhindsa said the growth in quick commerce was largely driven by the robust uptick in demand due to the multiple festivals and occasions in the quarter besides having the right assortment which addressed the most pertinent needs of customers.

"While most of the GOV growth was order volume-led, part of it was also driven by an increase in average order value, which continued to benefit from a higher mix of high ASP (average selling price) categories such as electronics, festive needs, among others," he added. Dhindsa said 90 per cent of Blinkit's GOV comes from its top eight cities currently and in the third quarter, it launched stores in two new cities -- Goa and Agra.

3.Hyperpure biz

For the quick commerce, the adjusted revenue was 644 crore. It was 301 crore in the year-ago period, the company said, adding that its B2B supplies under Hyperpure clocked adjusted revenue of 859 crore, up from 421 crore in the same quarter a year ago.

Goyal said Hyperpure witnessed growth in both the core restaurant supplies business and the relatively newer quick commerce opportunity. "To address a growing need of our restaurant partners, we are now setting up a plant for processing value-added food supplies, including sauces, spreads, pre-cut and semi-finished perishable products, among others. ‘’

4.Food & delivery biz

Rakesh Ranjan, Food and Delivery CEO at Zomato, said the demand environment was muted in the Q3FY24 and that was true even for the broader restaurant industry.

"One of the things driving the growth of our food delivery business is the fact that our platform is still underserved from a supply standpoint. The monthly active restaurant base on our platform has grown by 20 per cent-plus YoY in Q3FY24. This growth is driven both by new restaurants opening up and our coverage of existing restaurants increasing," Ranjan added.

On the possibility of a hike in platform fee, he said it is too early to predict how the platform fee will shape up and the company is "still testing the waters on what works and makes sense here from a long-term perspective".

"We will continue to tactically use levers like these to optimise both growth and margin expansion. Most importantly, as we do this, we will also continue to ensure the viability and well-being of each of our stakeholders, our customers, restaurant partners and delivery partners," Ranjan said.

5.Cash balance

While Zomato's cash balance is over 12,000 crore as of the third quarter, company CFO Akshant Goyal ruled out plans to return cash to shareholders saying at this point the company wants to keep a strong balance sheet. "I would say that it is safe to assume that we may not do any buyback or dividend distribution in FY24 or FY25," he said.

Consumers ordered more food from restaurants during the men's Cricket World Cup, which took place between October 5 and November 19. This, coupled with the festive season, when Zomato bring in a majority share of their yearly sales, helped boost Zomato's topline. Shares of Zomato settled 2.42 per cent higher at 144 apiece on the BSE.

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Published: 08 Feb 2024, 03:25 PM IST
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