Zomato Q4 Results: Consolidated loss widens to Rs 360 cr as expenses mount

Online food delivery platform Zomato on Monday reported that its consolidated net loss widened to Rs 360 crore in the quarter ending March 31, 2022 as expenses nearly doubled. The company reported net loss of Rs 134 crore in the year-ago period.

Consolidated revenue from operations rose 75% to Rs 1,212 crore as against Rs 692 crore in Q4FY21. Total expenses during the fourth quarter rose to Rs 1,701.7 crore as against Rs 885 crore earlier, the company said.

On Monday, the company's scrip on BSE closed 2% lower at Rs 56.80.

"Average monthly transacting customers were at an all time high of 15.7 million last quartergrowing from 15.3 million in the previous quarter. Likewise, average monthly active restaurant partners and delivery partners were at all time highs as well," the Gurugram-based company said in a stock exchange filing.

"We launched in 300+ new cities in Q4FY22. We are now present in 1,000+ towns and cities across India," the company further said. 

Gross Order Value grew by 6% QoQ and 77% YoY to a record high of Rs 5,850 crore in Q4FY22. This was driven by healthy growth in order volumes while the average order value remained stable, the company said.

For the fiscal ended March 31, 2022 as well, consolidated net loss increased to Rs 1,222.5 crore. The company had posted a consolidated net loss of Rs 816.4 crore in the previous financial year, the filing said.

Revenue from operations in FY22 stood at Rs 4,192.4 crore as against Rs 1,993.8 crore in FY21, it said.

Commenting on the performance, Zomato Founder and CEO Deepinder Goyal said, "We think our growth trajectory is back on track, and we don't foresee 'post-COVID ramifications' affecting our growth rate anymore. Having said that, even before COVID, growth in our business has been lumpy (and not linear) -- so it is essential to take a long term view of our business."

He further said Zomato is aiming for accelerated growth along with further reduction in losses and increasing profits in some time.

"We are clear on what our long term shareholders expect of us and we are working hard to deliver on both growth and profitability expectations," Goyal added.

On reports of Zomato acquiring Blinkit (formerly Grofers), he said, "We have committed to give them a short term loan of up to USD 150 million to fund their short term capital needs. Beyond that, there is nothing to share at this moment."

He, however, said, "We continue to remain bullish on quick commerce, especially given how synergistic it is to our core food delivery business, and are excited with the progress that Blinkit has made in this space. While there is a lot to do as the business is at its early stages, there's still a lot of low hanging fruit to drive growth and efficiency."

Blinkit has grown well in the past six months, and has also significantly reduced its operating losses, Goyal added.

Commenting on Zomato Instant, the 10-minute food delivery service pilot, Goyal said the company is still studying to understand whether customers order more if delivery time reduces to 10 minutes, and is there a business model where delivery of food can be done in 10 minutes at the same or better contribution per order than the company's existing business.

"We do not have any answers here yet as the pilot has been live for a few days and only in one location," he said, adding some update on this could be expected in the next quarter and scaling it further would depend on the outcome of the current pilot.

On the 'gig worker' shortage, he said Zomato is "seeing some stress on the availability of delivery partners in the current quarter in select large cities since the last week of April."

While terming it as short-term in nature as the post-COVID economic recovery has brought back jobs in cities, he said the company lost some delivery partners to such jobs.

Moreover, Goyal said, all the workforce which migrated to their hometowns or villages during the first COVID-19 wave has not yet come back to the cities for work, "thus hampering our delivery partner acquisition rate."

"We think things will normalise in a few weeks. We are also working on various long term initiatives to drive more stability of delivery partners in our fleet," he said.