Zomatos Consolidated Loss Narrows In Q4; Eyes Profitability In Next Four Quarters

Zomato had posted a consolidated net loss of ₹359.7 crore in the same period last year. Even on a sequential basis, the Gurugram-based company's loss narrowed by around 46%, as per Zomato’s latest regulatory filing.

“The quarterly growth is low because of the demand slowdown we witnessed in our business from late October last year till the end of January this year. As we had mentioned in our last letter, we had started seeing green shoots of recovery in the first week of February 2023,“ said Deepinder Goyal, founder and chief executive officer (CEO) of Zomato.

Zomato’s revenue from operations for the last quarter came in at ₹2,056 crore compared with ₹1,211.8 crore in the corresponding quarter of the previous year.

The company also announced that its business, excluding the quick commerce vertical, BlinkIt, turned adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) positive. It calculates adjusted Ebitda as Ebitda plus share-based payment expense minus rental paid for the period.

The profitability was driven by the company’s food delivery business, which generated an adjusted Ebitda of ₹78 crore in the March quarter. It added that the difference between the adjusted Ebitda and net profit has narrowed significantly over time.

Zomato’s adjusted revenue from the food delivery arm, which accounted for most of its topline, stood at ₹1530 crore, down from 1565 crore in the quarter ago. This is mainly due to the slowdown in the overall food delivery space which also brought down its gross order value (GOV) to ₹6559 crore in the March quarter from ₹6680 crore in the December quarter.

Zomato’s food delivery business was followed by its business-to-business arm Hyperpure and Blinkit, which brought in adjusted revenues of ₹478 crore and ₹363 crore, respectively.

“In food delivery business…we will continue with the same mindset as we look to further expand the adjusted Ebitda margin (from the current 1.2%) to our stated goal of +4-5% of GOV (which would translate to ~ ₹1,000 to ₹1,300 crores of annual cash operating profit at the current scale of the food delivery business)," said Goyal.

Shares of the company settled 1.72% higher at ₹64.54 apiece on the BSE on Friday.