Foodtech major Zomato announced on Thursday (August 3) that it turned profitable in the first quarter of the financial year 2023-24 (FY24). The company reported a consolidated profit after tax (PAT) of INR 2 Cr, a significant turnaround from the consolidated net loss of INR 186 Cr in the same quarter of the previous fiscal. This remarkable achievement was driven by robust growth across all business segments.
Zomato Impressive Revenue Growth and Contribution Margin
Zomato’s operating revenue for the reported quarter stood at INR 2,416 Cr, an increase from INR 1,413.9 Cr in Q1 FY23. This revenue growth also reflects a 17.5% rise from the INR 2,056 Cr operating revenue reported in the previous quarter, Q4 FY23. The food delivery business registered an adjusted revenue of INR 1,742 Cr, witnessing an 18.5% year-on-year (YoY) growth and almost 14% increase from Q4 FY23.
Positive Performance of Quick-Commerce Business
Blinkit, Zomato’s quick-commerce business, achieved a significant milestone as it turned contribution positive for the first time in June 2023. The adjusted revenue of Blinkit reached INR 384 Cr, growing by 5.7% sequentially, with a gross order value (GOV) of INR 2,140 Cr, showing a 4.6% rise quarter-on-quarter (QoQ). Despite slower GOV growth in Q1 FY24 due to temporary disruptions in April, Blinkit’s adjusted EBITDA loss narrowed to INR 133 Cr in the reported quarter.
Zomato Positive Outlook and Focus on Profitability
Zomato remains optimistic about its future prospects. The company expects its consolidated business to remain profitable and continue delivering over 40% YoY topline (adjusted revenue) growth for at least the next couple of years. It aims to achieve breakeven on an adjusted EBITDA basis for Blinkit in the coming four quarters.
Expense Management and Share Performance
Zomato has made efforts to manage expenses effectively. Employee benefit expenses were brought down both on a QoQ and YoY basis, while ESOP expenses declined from the previous year. However, advertising and sales promotions expenses rose 13% YoY, and delivery and related charges increased by 41.6% YoY. Despite the rise in expenses, Zomato’s shares closed 1.5% higher at INR 86.22 on the BSE following the news of its profitability in Q1 FY24.
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