Online food delivery giant Zomato on Wednesday reported a net loss of Rs 429.6 crore in the July-September quarter against a loss of Rs 229.6 crore in the year-ago quarter. The company had posted a loss of Rs 356.2 crore in the preceding June quarter. Zomato said its adjusted revenue in September quarter stood at Rs 1,420 crore, registering a 22.6 per cent growth quarter-over-quarter (QoQ) and 144.9 per cent growth year-over-year (YoY). Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) loss widened to Rs 310 crore during the quarter under review from Rs 170 crore in the June quarter and Rs 70 crore in the year-ago quarter. Zomato said the restaurant industry bounced back during the quarter, with overall customer traffic on its platform in India increasing to 5.9 crore average monthly active users (India MAU) as compared to 4.5 crore in June quarter. On dining-out, Zomato said the sector is still recovering from the shockwaves of COVID-19, and will take a few months to get back on the growth path it was on pre-COVID. The company attributed the increase in its loss to investments in the growth of food delivery business. "Three reasons to be specific - a) increased spending on branding and marketing for customer acquisition, b) increased investments and growing share of smaller/emerging geographies in our business (which are less profitable today compared to more mature cities) and c) increased delivery costs due to unpredictable weather and increase in fuel prices," Zomato said. Also Read: Zomato pumps in $275 mn in 4 startups in 6 months; eyes investment worth $1 bn in India
The gross order value of India food delivery grew 19 per cent QoQ and 158 per cent YoY to Rs 5,410 crore during the quarter. The delivery cost per order increased by Rs 5 per during the September quarter as compared to the preceding June quarter due to the prolonged and unpredictable rainy season and sharp increase in fuel prices. "We don't expect the delivery costs to go up further and overall feel confident about our contribution margin staying positive in the mid, as well as long term," the company said. Zomato said after a hiatus of two years, it has started launching food delivery in new cities again. On its long-term strategy, the company said it is focused on brutal prioritisation, whereby it will divest or shut down any businesses which aren't likely to drive exponential value for shareholders in the long term. Besides, it will invest in its core food businesses and the ecosystem around it to make it a robust long-term value driver, and build the hyperlocal e-commerce ecosystem by leveraging its strengths to invest and partner with other companies to tap into growth opportunities beyond food. Shares of Zomato on Wednesday closed 1.31 per cent lower at Rs 135.75 on the BSE.
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