Zomato Q1 Results

Zomato Q1 Results: Net Profit of ₹253 Crore and Revenue Growth of Nearly 75%

Zomato Ltd., a prominent food delivery aggregator, has announced its financial results for the first quarter of the fiscal year. The company has reported substantial growth in both revenue and profit, reflecting a strong performance amidst the competitive food delivery industry.

1. Revenue Growth:

1. • Quarterly Revenue: Zomato’s revenue for the June quarter reached ₹4,206 crore, marking an impressive increase of nearly 74% compared to ₹1,416 crore in the same quarter last year.
   • Growth Drivers: This growth can be attributed to increased demand for food delivery services, expansion of market presence, and enhanced operational efficiencies.

2. Net Profit:

1. • Current Profit: Zomato reported a net profit of ₹253 crore. This is a significant leap from the ₹2 crore net profit recorded in the same quarter last year.
   • Previous Quarter’s Context: The base quarter was notable as it was the first time Zomato achieved a quarterly net profit, setting a new benchmark for the company’s financial performance.

3. Other Income:

1. • Amount: The company’s other income stood at ₹236 crore, up from ₹181 crore in the previous year’s quarter.
   • Source: This increase is largely due to Zomato’s substantial cash reserves, amounting to over ₹12,000 crore, which generate additional income.

4. EBITDA and Margin:

1. • EBITDA: The company achieved an EBITDA of ₹177 crore, a turnaround from the EBITDA loss of ₹48 crore reported in the same quarter last year.
   • EBITDA Margin: The EBITDA margin for the quarter was 4.2%, indicating improved profitability and operational efficiency.

5. Gross Order Value (GOV):

1. • GOV Figures: Zomato’s Gross Order Value increased by 53% to ₹15,455 crore during the quarter.
   • Definition: GOV includes the combined value of consumer-facing businesses such as food delivery, quick-commerce, and going-out services.

6. Blinkit Performance:

1. • Adjusted EBITDA: Blinkit, Zomato’s quick-commerce business, reported an adjusted EBITDA of negative ₹3 crore.
   • Expansion: Blinkit added 113 stores, exceeding their guidance of 100 stores, which could support future revenue growth.

7. Employee Costs:

1. • ESOP Charges: The share of Employee Stock Option Plan (ESOP) charges in total employee costs decreased from 54% at the end of FY 2022 to 31% at the end of FY 2024.
   • Cost Reduction: Total employee costs have decreased to 12%, with an expected range of 6-8% of adjusted revenue by FY 2026.

8. Stock Market Reaction:

1. • Share Performance: Following the earnings announcement, Zomato’s shares saw a sharp increase and are currently trading 1% higher at ₹231.63.

Conclusion:

Zomato’s Q1 results for the fiscal year showcase a remarkable turnaround in profitability and revenue growth. The substantial increase in revenue and net profit, along with a positive EBITDA, reflects the company’s successful expansion strategies and operational improvements. Despite some challenges in Blinkit’s performance and fluctuations in employee costs, Zomato’s strong financial position and stock market reaction highlight its robust market presence and potential for future growth. Investors and stakeholders can view these results as a positive indicator of Zomato’s continued progress and profitability.

FAQs:

1. What were Zomato’s revenue and net profit for Q1?

1. • Zomato’s revenue for Q1 was ₹4,206 crore, representing a 74% year-on-year increase. The net profit for the same quarter was ₹253 crore.

2. How does the current quarter’s performance compare to the previous year?

1. • The current quarter saw a significant improvement in net profit from ₹2 crore last year, and EBITDA improved from a loss of ₹48 crore to a positive ₹177 crore.

3. What is the significance of Zomato’s Gross Order Value (GOV)?

1. • The GOV of ₹15,455 crore reflects the total value of Zomato’s consumer-facing businesses, including food delivery and quick-commerce, demonstrating the company’s market impact and consumer engagement.

4. What challenges did Blinkit face this quarter?

1. • Blinkit reported an adjusted EBITDA loss of ₹3 crore, though it exceeded its store expansion target by adding 113 stores.

5. How have employee costs impacted Zomato’s financials?

1. • Zomato has reduced the share of ESOP charges in total employee costs from 54% to 31% and aims to further lower these costs to 6-8% of adjusted revenue by FY 2026.

6. How did the stock market react to the earnings announcement?

1. • Zomato’s shares experienced a 1% increase, trading at ₹231.63 post-earnings announcement, reflecting positive investor sentiment.

Zomato Q1 Results

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