Zomato Ltd on Friday reported a second straight quarter of profit in the September quarter. The online food delivery platform reported a profit of Rs 36 crore for the September quarter compared with Rs 2 crore in June quarter and a loss of Rs 251 crore in the corresponding quarter last year. Zomato said its sales from operation jumped 71.46 per cent YoY to Rs 2,848 crore compared with Rs 1,661 crore in the same quarter last year.
Zomato said it was aiming for at least 100 new (net) stores within FY24, and should exit March 2024 with somewhere around 480 stores in total. Blinkit saw 29 per cent sequential GOV growth, it said. The growth was partly due to the low base effect, given the temporary disruption in the business in the previous quarter. On a YoY basis, the GOV growth was 86 per cent, as expected and in-line with the past, Zomato said.
For the quarter, Zomato added a net addition of 28 new Blinkit stores during the quarter, taking our overall store count to 411 stores as at the end of the quarter.
In some of these cities, it said Blinkit’s GOV is already more than Zomato’s GOV. "At this pace, where Blinkit’s GOV is growing at 80 per cent-plus YoY, we wouldn’t be surprised if Blinkit’s GOV becomes multiple times larger than Zomato’s GOV in overlapping cities, which will more than compensate for the wider geographical footprint of Zomato. Even on the profitability front, over 60 per cent of our stores are now contribution positive, and many of them are already at 5 per cent-plus contribution margin (as a percentage of GOV)," Zomato said.
Zomato said it is seeing profitable economics not just at a store level but also at a city level - where some of the cities are now operating at similar contribution per order as the food delivery business in those cities. "So even from a potential profit pool perspective, we think quick commerce is a larger opportunity than food deliver," it said.
On the profitability front, Zomato said posted a second consecutive profitable quarter with adjusted Ebitda of Rs 41 crore as compared to Rs 12 crore profit in the previous quarter (Q1FY24) and a loss of Rs 192 crore last year same quarter (Q2FY23)," Zomato said.
Zomato said its gross order (GOV) across B2C businesses -- food delivery, quick commerce and Going-out, grew 47 per cent YoY 13 per cent sequentially. Food delivery GOV grew 20 per cent YoY (9 per cent sequentially) and is recovering well from the demand slowdown that Zomato witnessed in the last two quarters of FY23, the company said in an exchange filing.
Zomato said its adjusted revenue to compound at a 40 per cent-plus growth rate over the next couple of years and that it remains on track to deliver on that outlook. "Our YoY adjusted revenue growth has been comfortably above 40 per cent, even in the past 8 quarters wherein the food business (excluding quick commerce) growth has been 30 per cent-plus," Zomato said.
Zomato said its GOV growth was almost entirely led by growth in order volumes, while the average order value remained largely flat. A visible uptick in demand coupled with some great execution by the team led to the robust growth in order volumes.
"Order volume growth is typically negatively impacted in this quarter due to lower delivery partner availability during rains. However, this year we were able to improve on that through better all-round execution. Another key driver of GOV growth in the quarter was the growing adoption of our Gold program, which is continuing to drive higher ordering frequency amongst members. We now have 3.8 million members (as at the end of Q2FY24) that contribute ~40% of GOV in the food delivery business," it said.
Following the Q2 results, Zomato shares climbed 7.40 per cent to Rs 115.45 on BSE.
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