Zomato reports profit at Rs 36 cr in Q2, revenue up 71% to Rs 2,848 cr

Surges 18x sequentially in Q2; uptick in adoption of loyalty plan key driver

Zomato on Friday reported its second consecutive quarter of consolidated net profits at Rs 36 crore during the second quarter (Q2) of financial year 2023-24 (FY24), up from Rs 2 crore in Q1. The company had reported a net loss of Rs 251 crore during the corresponding period last year.

Zomato’s revenue from operations rose 71 per cent year-on-year (Y-o-Y) to Rs 2,848 crore in Q2 from Rs 1,661 crore a year ago. It had reported a revenue of Rs 2,416 crore during the previous quarter.

“The growth momentum we witnessed in Q1 FY24 continued in Q2 FY24, driven by healthy growth across all our businesses,” said Deepinder Goyal, founder and chief executive officer (CEO), Zomato, in a letter to shareholders. The growth drivers for the company include the money it was charging for every delivery and uptick in the adoption of its loyalty programme. According to the company’s statement to its shareholders, a key driver of gross order value (GOV) growth in the quarter was the growing adoption of its Gold program. It now has 3.8 million members (at the end of Q2FY24) and contributes 40 per cent of GOV in the food delivery business.

 

Food delivery

Adjusted revenue for its food delivery business increased to Rs 1,742 crore in Q1 from Rs 1,530 crore a quarter ago, and Rs 1,470 crore in the year-ago period.

The GOV for Zomato’s food delivery business increased 9 per cent Q-o-Q from Rs 7,318 crore in Q1 to Rs 7,980 in Q2. On a yearly basis, GOV increased from Rs 6,631 crore in Q2 FY23.

“GOV growth was almost entirely led by growth in order volumes, while the average order value remained largely flat. A visible uptick in demand, coupled with some great execution by the team, led to the robust growth in order volumes,” said Rakesh Ranjan, CEO of Zomato’s food ordering and delivery business.

Chief financial officer (CFO) Akshant Goyal revealed that Gold orders are less profitable than non-Gold orders. This is due to higher delivery costs, priority service to members during peak hours, and cost on account of the no-delay guarantee benefit available to Gold members.

“Subscription fees collected from the members cover only a small part of the incremental costs. However, that gap is starting to narrow, driven by efficiencies across both pricing and cost of the program,” Akshant said.

Average monthly transacting customers for its food delivery vertical grew to 18.4 million from 17.5 million a quarter ago.

Blinkit

The firm’s quick commerce arm Blinkit turned contribution positive for the first time during Q2.

Its revenue increased to Rs 505 crore from Rs 384 crore in the previous quarter. GOV was reported to be Rs 2,760 crore, compared to Rs 2,140 crore a quarter ago.