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Food delivery aggregator Zomato reported a profit of Rs 175 crore for the fourth quarter ended March 31, 2024. This is the fourth consecutive quarter of profits reported by the company. In the fourth quarter of financial year 24 the company had a loss of Rs 188 crore.
On a sequential basis, Zomato’s net profit was up 26.8 per cent from Rs 138 crore in the third quarter of financial year 24.
Revenue for the quarter was bolstered by its quick commerce business Blinkit, restaurant business and its business-to-business offering. Revenue for the fourth quarter, at Rs 3,562 crore, was up 73 per cent on a year-on-year basis. On a sequential basis, the revenue was up 8.3 per cent.
For the full year, Zomato reported revenue of Rs 12,114 crore, up 71.1 crore from financial year 23. The profit for the full year came in at Rs 351 crore, up from a loss of Rs 971 crore.
Zomato, however, missed estimates on net income, though its revenue performance was a beat, according to Bloomberg estimates. Bloomberg had estimated revenue to be at Rs 3,485 crore and net income to be at Rs 187 crore.
As mentioned in the past few quarters, the gross order value of quick commerce continues to perform well in the fourth quarter as well. Blinkit’s gross order value at Rs 4,027 crore grew 97 per cent year-on-year and 14 per cent quarter-on-quarter. Whereas, the food delivery business’ gross order value of Rs 8,439 crore grew 28 per cent year-on-year and was marginally down by 0.6 per cent sequentially.
The gross order value across the business-to-consumer business — food delivery, quick commerce, and going-out — grew 51 per cent year-on-year and was up 5 per cent quarter-on-quarter. The business-to-business business, Hyperpure’s revenue grew 99 per cent year-on-year and 11 per cent sequentially.
With quick commerce finally showing profitability for the month of March, the company is now focusing on expanding its reach. For financial year 25 the company is aiming to add 1,000 stores, with 100 being added in the first quarter of financial year 25.
“In the fourth quarter of financial year 24, we added 75 net new stores taking our total store count to 526. For comparison, this is more than the number of stores we added in the three preceding quarters cumulatively. With this aggressive store expansion planned (almost double the store count in 12 months), the overall adjusted earnings before interest, taxes, depreciation, and amortisation in our business is likely to hover around zero for the next few quarters,” said Albinder Dhindsa, founder and chief executive officer, Blinkit.
With the expansion plan, the company expects a 4-5 per cent adjusted earnings before interest, taxes, depreciation, and amortisation margin (as a percentage of gross order value).
Deepinder Goyal, founder and chief executive officer of Zomato, said that he was grateful that the bet he took has worked out. “We have only always started a business to protect or grow something that we already have, with a singular goal – survive. Even when we acquired Blinkit, we outlined that one of the key reasons to acquire the business was to defend the food delivery business because a well-entrenched quick commerce player could pose an easy threat to the food delivery business in the long term,” said Goyal.
Margins (adjusted earnings before interest, taxes, depreciation, and amortisation) for the quarter came in at Rs 194 crore, an improvement of 2.1 percentage points over the last four quarters.
The key drivers for the improvement in margins were higher average order value, improvement in take rate and ad monetisation, introduction of a platform fee, and cost efficiencies. “Together, these factors more than compensated for the lower customer delivery fee on account of the free delivery benefit on Gold orders,” said Goyal.
The average monthly transacting customers for the fourth quarter touched 19 million. Blinkit’s average monthly transacting customers touched 6.4 million, up from 5.4 million in the preceding quarter.
The company announced its intention to create a new employee stock option plan pool of 2 per cent of its outstanding share capital on a fully diluted basis. “We will continue to follow our earlier format of employee stock options with face value as the strike price; vesting will be linked to time and performance conditions (details of which will follow in the postal ballot notice for shareholders’ approval). This new employee stock option pool should be sufficient for us for at least the next five years,” said Akshant Goyal, chief financial officer, Zomato.
The company said that in a people-dependent business where execution and innovation are the only determinants of survival, employee stock options are a great way to drive high-performance culture.
First Published: May 13 2024 | 5:41 PM IST
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