Zomato, the online food delivery firm, on Thursday, reported its first-ever consolidated profit after tax (PAT) of Rs 2 crore for the April-June quarter of 2023-24 (Q1 FY24) backed by revenue growth. This marked a turnaround for the food aggregator which posted a net loss of Rs 186 crore in the first quarter of the financial year 2022-23 (Q1 FY23).
In a letter to Shareholders, the company said, "Consolidated business (including quick commerce) is now Adjusted EBITDA and PAT positive (first time ever!). We have (again) delivered ahead of our guidance on getting to this milestone"
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q1 FY24 stood at 12 core. The company's consolidated revenue from operations in Q1 FY24 stood at Rs 2,416 crore, up 70.9 per cent compared to Rs 1,414 crore in Q1 FY23. However, total expenses also rose to Rs 2,612 crore compared to Rs 1,768 crore in the same quarter last year.
In a letter to shareholders, Zomato Managing Director and Chief Executive Officer (CEO) Deepinder Goyal said the company has been working hard to make its business less complex, and putting the right people at the right spots within its businesses.
"...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," he said.
In Q1 FY24, Zomato's food delivery gross order value (GOV) witnessed an 11.4 per cent expansion compared to last quarter, reaching Rs 7,318 crore. This after a contraction in Q4 FY23 due to inflation and concerns about long-term scalability. During the March quarter, the GOV for food delivery was Rs 6,569 crore.
Additionally, average monthly transacting users increased by 5.4 per cent in the first quarter of the current financial year to 17.5 million compared to 16.6 million in the March quarter.
Also Read: UK Retailer Wilko On Brink Of Collapse, 12,000 Jobs At Risk: Reports
Zomato Chief Financial Officer Akshant Goyal said, "Realistically speaking, we were expecting to hit this milestone in the September quarter, and we were being conservative in our earlier guidance. However, some critical parts of the team across our businesses out-executed our expectations/plans, and some of our initiatives delivered better outcomes than we had expected."
"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-plus YoY topline (adjusted revenue) growth for at least the next couple of years," Akshant said.
Zomato reported that its food delivery business achieved adjusted revenue of Rs 1,742 crore in Q1 FY24, a notable increase from Rs 1,470 crore in the same period last year. Additionally, the B2B business, Hyperpure, recorded revenue of Rs 617 crore, compared to Rs 273 crore in the first quarter of the last fiscal year.
CEO Deepinder said, "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 -- the smaller, unprofitable restaurants churned out and the average order value on our platform went up, driving both growth in revenue and improvement in profitability."
Revenue for quick commerce (Blinkit) stood at Rs 384 crore in Q1 FY24, up from Rs 164 crore in Q1 FY23
Blinkit Founder and CEO Albinder Dhindsa said there was a slower sequential gross order value (GOV) growth in the June quarter mainly due to the "temporary business disruption" in April, as a result of 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. While the operations were back on within a few days, we faced a challenging period of around 45 days where the overall gig workers available to work in our system was 15-20 per cent lower than normal," he said.