Zomato delivers ₹175-crore profit in Q4

Food delivery company Zomato Ltd on Monday reported a net profit of ₹175 crore for the quarter ended March 31, 2024, compared with ₹188-crore loss in the same quarter a year ago.

Revenue from operations rose 73% year-on-year to ₹3,562 crore for the fourth quarter as against ₹2,056 crore in Q4 FY23.

On a sequential basis, profit rose 27% from ₹138 crore posted in the December quarter while revenue increased 8.3%.

For the full financial year 2023-24, Zomato logged a profit of ₹351 crore from a loss of ₹971 crore in FY23.

The top line growth was driven by robust performance by food delivery service and quick commerce platform Blinkit. Zomato's food delivery business reported revenues of ₹1,739 crore in Q4 FY24, up from ₹1,172 crore in the year-ago period. The quick commerce business revenue stood at ₹769 crore during the quarter compared with ₹363 crore posted in Q4 FY23.

“One of the key vectors for growth for us right now is store expansion. In Q4FY24, we added 75 net new stores taking our total store count to 526. For comparison, this is more than the number of stores we added in the three preceding quarters cumulatively. Including this cost of expansion, we turned Adjusted EBITDA positive in the month of March 2024. In the current quarter (Q1FY25), we expect to add another 100 stores. At this point, we are aiming to get to 1,000 stores by the end of FY25,” says  Albinder Dhindsa, CEO, Blinkit.

“With this aggressive store expansion planned (almost 2x store count in 12 months), the overall Adjusted EBITDA in our business is likely to hover around zero for the next few quarters,” Dhindsa says.

“While we have a presence in 26 cities, the focus from an expansion standpoint is the top eight cities in India. Of the new stores that we opened in Q4FY24, 80% are in these top eight cities. We are significantly underpenetrated in the top cities. Our second largest city Bengaluru is less than 30% of Delhi NCR’s GOV (our largest market), with a similar gap in store count. The job for us over the next few quarters is to get Bengaluru and other large cities like Mumbai and Hyderabad to the penetration of Delhi NCR, both in terms of store footprint and GOV,” the Blinkit CEO says, adding that this alone will lead to 4 times increase in the company’s gross order value.

In the month of March 2024, Blinkit’s average delivery time was 12.5 minutes.

“We are just grateful that the bet that we took on Blinkit worked out just fine and we are not at a point where Akshant and I are getting fired for an expensive acquisition gone wrong. We are also grateful to our Board, for believing in the distant bet we were taking at that time, and helping us bring it all together quickly over the last few quarters,” says Deepinder Goyal, CEO, Zomato.