Zomato expects business recovery from Covid disruptions in 3-6 months

By: |
Published: July 11, 2020 6:30 AM

Zomato’s FY20 GMV for the India food delivery business grew by 108% year-on-year to $1.49 billion.

Zomato did not disclose revenue figures for Q1FY20.Zomato did not disclose revenue figures for Q1FY20.

Zomato expects its business to recover from Covid disruptions in the next three to six months. Its total revenue is estimated to reach nearly 60% of pre-Covid peaks of $23 million per month by July, the company said in its mid-Covid-19 performance report released on Friday.

Gross merchandise value (GMV) for the firm’s core food delivery business (India) that dipped by 80% in the last week of March against the peak pre-Covid week in mid-February — the lowest point in two years — has now recovered to almost 60% of pre-Covid levels.

As professionals have started migrating back to their cities of work, demand is further expected to improve. “We expect sharp recovery in order volumes as lockdowns continue to ease and the operating environment continues to improve,” the Gurgaon-based food delivery company said.

Zomato’s FY20 GMV for the India food delivery business grew by 108% year-on-year to $1.49 billion.

Total revenue increased by 105% y-o-y to $394 million in FY20 while costs rose by 47% during the period, the firm said. Revenue during the April-June quarter stood at $41 million. Zomato did not disclose revenue figures for Q1FY20. Ebitda losses, however, increased to $293 million in FY20 from $277 million in FY19. Zomato claims that its monthly burn rate will be below $1million this month.

“While Covid-19 has impacted the size of our business, it has accelerated our journey to profitability. In terms of the size of the business, Covid-19 has set us back by a year or so — but a year is only a small blip when you are building a company for the next 100 years,” the company said.

Zomato and rival Swiggy had seen a considerable drop in order volumes after the outbreak of the virus in March, while a shift in consumer preference for hygiene over convenience contributed towards the crushing volumes, and corporate India’s move to work from home also hammered businesses. Office-goers form a major chunk of food aggregators’ customer base. Operational restrictions in various cities had also added to the woes.

Zomato laid off nearly 13% of its global workforce and undertook temporary pay cuts for the remainder of the staff starting June.

Despite restaurants’ opposition to Zomato’s Gold programme, its dining-out business grew steadily across India and international markets, the firm claimed. Revenue for the segment increased to $56.1 million in FY20 from $46.5 million in FY19. The tally of Zomato Gold’s paid members rose to 1.7 million as of March 2020 from 1 million as of March 2019.

Revenues for Zomato’s B2B segment Hyperpure increased to $14.7 million in FY20 compared with $1.8 million in FY19.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Bitcoin now as big as Coca Cola, Intel as crypto bellwether hits market cap milestone
2Now doctors, CAs, lawyers also can get loan under MSME emergency credit scheme as govt relaxes criteria
3MSME credit guarantee scheme gets a massive boost: Now, individual entrepreneurs can also apply for loans