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In Q2 FY24, Zomato turned around its financial performance, posting a consolidated profit against a loss of ₹251 crore in Q2 FY23. The company’s revenue surged by 71% year-on-year to ₹2,848 crore, while total expenses amounted to ₹3,039 crore.
The growth in revenue was largely driven by a 47% YoY increase in Gross Order Value (GOV) across its B2C businesses, including Blinkit, reaching ₹11,422 crore. This growth was attributed to an uptick in monthly transacting customers. Blinkit also reported a quarter-on-quarter revenue growth of +12.7%.
Zomato’s board approved the sale of its entire stake in ZMT Europe LDA for approximately ₹1,59,45,300 (1.80 lakh euros). Blinkit, Zomato’s quick commerce division, achieved a positive shift in contribution margin from -7.3 percent to 1.3 percent and added 28 new stores during the quarter.
CEO Deepinder Goyal highlighted the continuation of robust growth from Q1FY24 into Q2FY24 across all operations. The company reported its second consecutive profitable quarter with an Adjusted EBITDA of ₹41 crore, marking a significant improvement from the ₹12 crore profit in Q1FY24 and a major turnaround from a ₹192 crore (INR100 crore = approx. USD12 million) loss in Q2FY23.
Zomato anticipates high single-digit QoQ growth in GOV for food delivery in the next quarter. Blinkit ended the quarter with a total of 411 stores and expects substantial growth due to upcoming major festivals like Navratri, Dussehra, and Diwali. Blinkit’s GOV growth reached 86 percent YoY.
Despite the entry of ONDC into the market, competition is not expected to intensify further. HSBC expressed positivity about Zomato’s long-term prospects, particularly its quick commerce business, which shows impressive growth with EBITDA break-even in sight. The management’s strategy is to prioritize growth over margins quarter to quarter. Nuvama, adopting the SOTP valuation methodology, expects the management to aim for higher-than-anticipated growth.
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