INDIA – Zomato Ltd has registered a narrowed consolidated net loss in the second quarter to ₹251 crores from ₹430 crores a year ago on a sharp rise in its income from food delivery and its wholesale Hyperpure unit.
Revenue from operations of the Indian multinational restaurant aggregator and food delivery company increased by 62.2% YoY to ₹1,661 crores.
The earnings include about 50-day financials of Blinkit, an Indian-based quick delivery company that Zomato acquired in August.
The company noted that Adjusted revenue for Blinkit grew 48% YoY, which translates to annualized revenue of US$1.05 billion.
This quarter has marked a milestone for Zomato which for the first time has crossed the billion-dollar annualized revenue mark, the online food delivery aggregator said.
The Gurugram-based company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss narrowed to ₹192 crores from ₹310 crores in the year earlier.
As far as quick commerce is concerned, the company said it has not seen much of a slowdown in the business despite inflationary pressures.
The segment had gross order value growth of 3% QoQ, and 23% YoY, driven by growth in both order volumes and average order value.
The growth in order value led to an adjusted revenue jump of 27% to ₹1,581 crores from ₹1,248 crores in the year earlier and the business turned adjusted EBITDA positive for the first time in the September quarter.
“On the profitability front, contribution margin as a percentage of gross order value improved meaningfully from 2.8% in Q1 FY23 to 4.5% in Q2FY23. As a result, the food delivery adjusted EBITDA hit break-even in Q2FY23,” Zomato’s chief financial officer Akshant Goyal said in a letter to shareholders.
Average monthly transacting users increased to 17.5 million from 15.5 million in the same period last fiscal.
Goyal added: “While our food delivery business has been growing and steadily moving towards profitability, I believe there is room for the business to grow much faster than what it is currently trending at.”
“The increase in contribution margin is driven by improvements on both cost and revenue side… This has been the result of scale and heightened focus on profitability over the last few quarters.”
Zomato expects the adjusted operating loss to come down further and eventually get to break even in the next 2 to 4 quarters.
While most investors currently ascribe zero value to the Blinkit business, Zomato is confident this will change in due course of time.
Zomato has no plans to make any new minority investments, nor has there been any change in its capital allocation plans since the last quarter.