Zomato, the food delivery giant, has reported a robust performance for the fourth quarter (Q4) ending March 31, 2024. With a net profit of Rs.175 crore, compared to a loss of Rs 188 crore in the same period last year, the company is signaling a promising trajectory in its financial health. Despite missing the ET Now poll estimate of Rs 191 crore, Zomato’s profit marks its fourth consecutive profitable quarter, showcasing resilience and strategic planning in a dynamic market landscape.
Financial Highlights of Zomato Q4 results
Zomato witnessed a substantial 73% year-on-year growth in revenue from operations, reaching Rs 3,562 crore in Q4 FY24, up from Rs 2,056 crore in the corresponding period last year. Although marginally lower than the estimated Rs 3,579 crore, this surge underscores the company’s sustained revenue expansion efforts.
Notably, Zomato’s quick commerce arm, Blinkit, achieved a significant milestone by turning adjusted EBITDA positive in March 2024. This development reflects Blinkit’s growing contribution to Zomato’s overall profitability and highlights its potential as a key value driver.
The gross order value (GOV) across Zomato’s B2C businesses surged by 51% year-on-year to Rs 13,536 crore, showcasing robust demand and increased consumer engagement. Food delivery GOV grew by 28% year-on-year, while Blinkit’s GOV soared by an impressive 97%, indicating the success of Zomato’s diversified business model.
Zomato’s adjusted EBITDA witnessed a notable improvement, reaching Rs 194 crore in Q4 FY24, marking a significant Rs 369 crore increase compared to the same quarter last year. Despite the surge in total expenses, including marketing and sales promotion costs, the company’s contribution margin expanded to 7.5% from 5.8% a year ago, reflecting enhanced operational efficiency and strategic pricing initiatives.
Zomato’s India food ordering and delivery business reported a revenue of Rs 1,739 crore in Q4 FY24, representing a substantial increase from Rs 1,172 crore reported in the year-ago period. The quick commerce business revenue more than doubled to Rs 769 crore, underscoring its rapid growth trajectory and emerging prominence within Zomato’s portfolio.
Zomato is aggressively expanding its quick commerce business, aiming to reach 1,000 stores by March 2025. This ambitious target reflects the company’s commitment to capitalizing on the growing demand for quick commerce services and solidifying its market presence. Albinder Dhindsa, Founder & CEO of Blinkit, stated, “The rapid growth of Blinkit underscores our commitment to providing seamless quick commerce solutions. We are focused on accelerating store expansion and are on track to achieve our target of 1,000 stores by March 2025.”
CEO’s commitment
Deepinder Goyal, Zomato’s Managing Director & CEO, emphasized the company’s commitment to innovation and customer-centric principles. By leveraging its technological prowess and fostering value creation for stakeholders, including restaurant partners and delivery partners, Zomato aims to sustain its growth momentum and drive industry-wide transformation. “Our focus on rapid store expansion in the quick commerce segment reflects our confidence in the market demand and our commitment to delivering convenience to our customers”, he said.
Market’s reaction
Despite the initial market reaction, characterized by a 7% decline in stock price post-earnings announcement, Zomato’s strategic achievements and promising financial performance continue to instill confidence among investors.
With shares having more than tripled over the last 12 months, Zomato remains poised for continued growth and market leadership. Deepinder Goyal expressed his confidence by saying that, “We believe that we can continue to grow faster than the overall restaurant industry if we continue to innovate using our customer-first principles, while creating value for all our stakeholders.”
Zomato’s Q4 results exhibit its resilience, agility, and commitment to driving sustainable growth in a dynamic business environment. With a strong financial foundation, robust revenue growth, and strategic expansion initiatives, Zomato is well-positioned to capitalize on emerging opportunities and navigate challenges in the evolving food delivery landscape.
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