 "Zomato narrows losses to Rs 188 cr in Q4, expenses fall to Rs 2,431 cr")
Food delivery platform Zomato on Friday reported narrowing of losses both on a year-on-year (YoY) and sequential basis in the March quarter. The food aggregator’s consolidated loss narrowed to Rs 187.6 crore in the fourth quarter (Q4) of fiscal year (FY23) from Rs 346.6 crore in the December quarter (Q3), and Rs 359.7 crore in the corresponding quarter last fiscal.
In FY23, Zomato trimmed its losses to Rs 971 crore from Rs 1,225.5 crore in the previous financial year.
Revenue from operations for the company stood at Rs 2,056 crore for the quarter, up from Rs 1,948.2 crore in Q3, and Rs 1,211.8 in the corresponding period a year ago.
The firm’s total expenses fell to Rs 2,431 crore, down from Rs 2,485.3 crore in the previous quarter, and Rs 1,701.7 crore in the same period last fiscal year.
Zomato’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss narrowed to Rs 175 crore in Q4 from Rs 265 crore in Q3. Excluding its quick commerce, however, the food aggregator turned adjusted EBITDA positive in the March quarter.
The firm’s cash balance on a consolidated basis at the end of the March quarter was Rs 11,323 crore, compared to Rs 11,463 crore at the end of the December quarter. “Q4FY23 is the first quarter where the business generated surplus cash and we expect that to continue going forward,” said Akshant Goyal, chief financial officer.
Zomato also said it has appointed Rakesh Ranjan as chief executive officer (CEO)-food ordering and delivery business, while Rinshul Chandra has been designated as chief operating officer-food ordering and delivery business.
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In addition, Rishi Arora has been appointed as CEO-Zomato Hyperpure, a subsidiary of the company.
Food delivery
Adjusted revenue for the firm’s food delivery business came was Rs 1,530 crore for the quarter, down from Rs 1,565 crore a quarter ago, but up from Rs 1,284 crore in the year-ago period. The gross order value (GOV) for this business reached Rs 6,569 crore, down slightly on a quarter-on-quarter (QoQ) basis from Rs 6,680 crore. On a yearly basis, revenues increased from Rs 5,853 crore in Q4FY22.
“The quarterly growth is low because of the demand slowdown we witnessed from late October last year till the end of January this year,” Akshant said.
The firm has, however, started to see green shoots of recovery since February this year.
Average monthly transacting customers for its food delivery vertical stood at 16.6 million compared to 17.4 million a quarter ago. This decline was attributed to a strategic call of “churning out the bottom few percentiles of unprofitable customers”.
“In food delivery, over the last five quarters, we have improved our margins meaningfully while further strengthening our market position,” said Deepinder Goyal, CEO, Zomato. “We will continue with the same mindset as we look to expand the adjusted EBITDA margin (from the current 1.2 per cent) to our stated goal of more than 4-5 per cent of GOV,” he added.
Blinkit
The firm’s quick commerce business Blinkit reported an increase in its revenue to Rs 363 crore, up from Rs 301 crore a quarter ago, while its GOV for the quarter was reported to be Rs 2,046 crore, compared to Rs 1,749 crore a quarter ago.
“While there is still a long way to go in terms of margin improvement, we are pleased with the outcomes so far in a short period of time,” Goyal said, talking about Blinkit.
Hyperpure
The firm’s business-to-business (B2B) vertical Hyperpure saw its revenue rise to Rs 478 crore, compared to Rs 194 crore a year ago.
“While the number of unique restaurants billed fell from 44,000 in Q3FY23 to 42,000 in Q4FY23, the overall profitability of the business improved as a result of this,” Deepinder said.