New Delhi: Zomato, the food and grocery delivery platform based in Gurgaon, has announced a reduction in its net loss for the fourth quarter, narrowing it down to Rs 187.6 crore compared to Rs 359.7 crore in the previous year. The company also reported a significant increase in revenue from operations, which rose by 70% to Rs 2,056 crore. Additionally, Zomato achieved positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 28 crore, excluding the quick commerce business. Looking ahead, the company aims to attain a consolidated net profit within the next four quarters.
Deepinder Goyal, the founder and CEO of Zomato, expressed his confidence in achieving their targets, rating it at 9 out of 10. He outlined their strategy, which involves increasing profits in the food delivery business while minimizing losses in the quick commerce (Blinkit) business. The company’s stock ended on a positive note, closing at Rs 64.54 with a 1.72% increase on the BSE.
For the fiscal year ending on March 31, 2023, Zomato recorded a narrower loss of Rs 971 crore compared to Rs 1,209 crore in the previous year. The company’s revenue also saw substantial growth, reaching Rs 7,079 crore, a 69% increase in FY23.
In the March quarter, Zomato’s food delivery business experienced a more than threefold surge in adjusted EBITDA, reaching Rs 78 crore compared to the previous October-December period. While adjusted revenue for the vertical slightly decreased to Rs 1,530 crore from Rs 1,565 crore, this improvement marked a significant milestone for Zomato. Swiggy, their rival based in Bengaluru, also announced that their food delivery business turned profitable in March, excluding employee stock option costs.
Zomato made three key appointments during this period, naming Rakesh Ranjan as the chief executive officer and Rinshul Chandra as the chief operating officer for the food ordering and delivery vertical. Rishi Arora, previously appointed as the Blinkit co-founder, was appointed as the CEO of Zomato’s B2B grocery vertical, Hyperpure.
Zomato’s primary food delivery business generated a revenue of Rs 1,530 crore for the quarter, compared to Rs 1,284 crore in the previous year. The B2B vertical reported a revenue of Rs 478 crore, showing substantial growth from Rs 194 crore in the previous year. Blinkit reported revenue of Rs 363 crore, a slight increase from Rs 301 crore in the previous quarter.
The CFO of Zomato, Akshant Goyal, indicated that the company had gained market share in the food delivery sector during the March quarter as well as in FY23. However, the growth in food delivery gross order value (GOV) saw a decline from Rs 6,680 crore in the December quarter to Rs 6,569 crore in the March quarter. The company attributed this decline to a demand slowdown experienced from late October to the end of January. Nevertheless, Zomato expects to see improved GOV growth in the next quarter due to the ongoing recovery of their business.
The company clarified that the introduction of the Zomato Gold loyalty program did not impact its overall profitability timeline. The membership base for Zomato Gold reached 1.8 million during the quarter, and although it had a slight negative impact on contribution margins, it was compensated by progress in other revenue and cost factors.
Despite their focus on profitability, Zomato’s CFO emphasized that it has not hindered their growth. The company remains committed to expanding its services while maintaining financial sustainability.