A delivery worker of Zomato, an Indian food-delivery startup, wearing a face mask waits to collect order outside an eatery in Kolkata, India, July 13, 2021.
Credit: Reuters Photo
Bengaluru: Food delivery platform and online aggregator Zomato on Monday reported a 57 per cent decline in its consolidated net profit for the quarter ended-December, at Rs 59 crore, compared to Rs 138 crore in the same period last year.
However, the revenue from operations for the third quarter of the current fiscal year (Q3FY25) rose by 64 per cent, reaching Rs 5,405 crore, up from Rs 3,288 crore in the corresponding quarter of the previous financial year.
While the company’s performance improved in terms of profitability on a yearly basis, its consolidated adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 14 per cent to Rs 45 crore due to expansion in its quick commerce store network (Blinkit), where quarterly losses increased by Rs 95 crore.
Gurugram-headquartered Zomato expects these losses to continue in near term (one or two quarters) on the back of store expansion and greater load of under-utilised stores. Currently, its total store network is 1,007.
“The losses in our quick commerce business is largely on account of pulling forward the growth investments in the business that we would have otherwise made in a staggered manner over the next few quarters. As of now, it seems like we will get to our target of 2,000 stores by December 2025, earlier than our previous guidance of December 2026,” said Deepinder Goyal, founder and chief executive officer said in a note to shareholders.
Additionally, its investment in the new District app (standalone app for booking tickets for movies, events, and dining) is also going to drive the food tech into loss for the next year or so. However, it doesn’t expect these to be meaningful in the overall context of Zomato.
The gross order value (GOV) of its business to consumer (B2C) businesses grew 57 per cent on a yearly basis to Rs 20,206 crore in Q3FY25. Segment-wise, its food delivery GOV grew 17 per cent, while its quick commerce business witnessed a sharp jump of 120 per cent, on a year-on-year basis. However, the rapid delivery segment’s growth fell short of its annual guidance (more than 20 per cent on a year-on-year basis).
“Currently we are going through a broad-based slowdown in demand which started during the second half of November. Notwithstanding the current slowdown, we are positive about a recovery soon and remain confident of the long term outlook of 20%+ yearly GOV growth,” said Akshant Goyal, chief financial officer.
Zomato shares today plunged over 7 per cent to end the session at Rs 230.70 on the NSE.