Food delivery platform Zomato on Thursday posted profit for the first time at Rs 2 crore during the first quarter of FY24. It had posted a loss of Rs 186 crore during the corresponding quarter of FY23. The company recorded a revenue from operations at Rs 2,416 crore, up 70.9 per cent in comparison to Rs 1,414 crore during the same period last year. The company EBITDA loss stood at Rs 48 crore as against a loss of Rs 307 crore on-year. Zomato said that the quick commerce (Blinkit) business turned contribution positive for the first time ever in the month of June 2023, while adding that the company is expecting to deliver Adjusted EBITDA breakeven in the quick commerce business in the next four quarters.
While the total income during the quarter stood at Rs 2,597 crore, total expenses at Zomato came in at Rs 2,612 crore during Q1FY24.
Even as the food delivery platform, in its last quarterly shareholders’ letter, had mentioned that consolidated business will become profitable in the following four quarters, Zomato delivered a profit the very next quarter. “We have been working hard to make our business less complex, and putting the right people at the right spots within our businesses. These things do not have definite/measurable impact, and I can in hindsight say that most of our seemingly “risky” bets have changed the trajectory of the business significantly, much faster than we expected,” said Deepinder Goyal, CEO, Zomato.
Akshant Goyal, CFO, Zomato, added, “We expect our business to remain profitable going forward and knowing what we know today, we believe we will continue to deliver +40 per cent YoY topline (Adjusted Revenue) growth for at least the next couple of years.”
Zomato’s Q1 performance across business verticals
The adjusted revenue for Zomato’s food delivery business during the first quarter was at Rs 1,742 crore, while the Hyperpure (B2B supplies) business clocked an adjusted revenue of Rs 617 crore. The quick commerce segment posted adjective revenue of Rs 384 crore and other sources brought in a revenue of Rs 43 crore during the quarter.
“GOV growth in the food delivery business was driven by robust growth in number of orders as well as modest uptick in average order value. Following four factors were the primary reasons for this growth: 1) the demand recovery, 2) Q1 usually tends to be a seasonally stronger quarter for us, 3) growing adoption of our Gold program which drove higher frequency of ordering, and most importantly 4) great execution by the team,” said Rakesh Ranjan, CEO – food ordering and delivery business, Zomato.
Talking about the performance by Blinkit, Albinder Dhindsa, Co-founder and CEO, Blinkit, said, “The slower sequential GOV growth in Q1FY24 was mainly due to the temporary business disruption we had in the month of April resulting from the change in the delivery partner payout structure. Due to this, some of our dark stores were shut for a few days in certain parts of the country, which caused a decline in overall order volumes during the quarter. For us, this started to normalise in early June and we have seen healthy growth since then.”
Hyperpure revenue grew 29 per cent QoQ (126 per cent YoY) to Rs 617 crore in Q1FY24, driven by growth across core restaurant supplies business as well as the newer quick commerce opportunity. “In our restaurant supplies business, we increased the minimum order value threshold below which restaurants are not allowed to place orders on Hyperpure. This led to two things: 1) the smaller, unprofitable restaurants churned out and 2) the average order value on our platform went up, driving both growth in revenue and improvement in profitability,” said Deepinder Goyal.
He further added that Zomato’s dining-out business is also shaping up well. “Rs 515+ crore of GOV was transacted through Zomato Dining-Out in India in Q1FY24, which is ~7 per cent of the GOV our food delivery business did in the same quarter,” he said.
Zomato’s cash balance on a consolidated basis as at the end of 30th June 2023 was Rs 11,573 crore as compared to Rs 11,323 crore as at the end of 31st March 2023.