January 20, 2025
Zomato Ltd., a leading food delivery and restaurant discovery platform, reported a 57% year-on-year decrease in net profit for the third quarter of fiscal year 2024-25, amounting to ₹59 crore, down from ₹138 crore in the same period the previous year. This decline is primarily attributed to increased expenditures associated with the rapid expansion of its quick commerce segment, Blinkit.
Despite the drop in profit, Zomato's consolidated revenue from operations surged by 64% year-on-year, reaching ₹5,405 crore, compared to ₹3,288 crore in the corresponding quarter of the prior fiscal year.
The company's total expenses also rose significantly by 64% year-on-year to ₹5,533 crore, up from ₹3,383 crore, largely due to the expansion of Blinkit. The quick commerce arm's revenue more than doubled, increasing by 117% to ₹1,399 crore from ₹644 crore in the same quarter the previous year. However, Blinkit's losses widened to ₹103 crore, a 16% increase from the ₹89 crore loss reported in the corresponding period last year.
In response to heightened competition from rivals such as Swiggy's Instamart, Zepto, Tata's BigBasket, and Flipkart's Minutes, Zomato has accelerated its expansion plans for Blinkit. The company aims to reach its target of 2,000 stores by December 2025, ahead of the previously planned December 2026 timeline. As of the third quarter, Blinkit's store count surpassed 1,000, achieving this milestone one quarter earlier than anticipated.
Zomato's Chief Financial Officer, Akshant Goyal, indicated that the accelerated store expansion may impact near-term profits over the next one or two quarters due to under-utilized stores. However, he expressed optimism that, post-expansion, the business is likely to transition from being loss-making to becoming meaningfully profitable as a larger portion of the operations will comprise mature stores.
The company's core food delivery business experienced a 22% year-on-year revenue growth, while the 'Going Out' segment, which includes live events and ticketing, saw a 254% increase in revenue to ₹259 crore from ₹73 crore in the same quarter the previous year. Additionally, Zomato's B2B supplies vertical, Hyperpure, reported a 95% year-on-year revenue growth, reaching ₹1,671 crore.
Following the earnings announcement, Zomato's shares declined by 7%, closing at ₹231 on the National Stock Exchange.
0 Comments