Zomato (NSE: ZOMATO) released its much-anticipated financial results for the first quarter of fiscal 2024, ending on June 30, 2023, leaving investors overjoyed. In a historic achievement, the Indian food-delivery giant reported its very first profitable quarter, a milestone that has undoubtedly brought a sense of accomplishment. Zomato’s net profit in fiscal Q1 2024 amounted to Rs 2 crore, a remarkable turnaround from the net losses of Rs 186 crore and Rs 188 crore experienced during the same period last year and the previous quarter, respectively. This significant shift to profitability signals a new chapter in the company’s financial journey.
However, it’s important to note that this Rs 2 crore profit was primarily due to a one-time benefit recorded during the June quarter – a deferred tax of – Rs 17 crore. In simpler terms, Zomato had previously paid taxes in excess, and this deferred tax adjustment allowed them to reduce their current tax liability. This tax-related adjustment has positively impacted their net income for the current quarter but may not necessarily represent a recurring source of income.
Digging deeper into Zomato’s financial results for FYQ1 24, they recorded an operating loss of Rs 15 crore. While this is still a loss, it significantly improved from the operating losses of Rs 186 crore and Rs 204 crore experienced during the same period last year and the previous quarter, respectively.
Zomato revenue in fiscal Q1 2024 also surged a whopping 70.1% YoY to an all-time high of Rs 2,416 crore. On a quarterly basis, it’s an impressive 17.5% growth in operating revenue during the first quarter.
During the first quarter of fiscal 2024, Zomato witnessed a substantial improvement in its consolidated adjusted EBITDA, reaching Rs 12 crore, compared to a loss of Rs 152 crore in the same quarter of the previous fiscal year (Q1FY23). This significant progress reflects the company’s efforts to optimize operations and control costs effectively.
Notably, Zomato’s adjusted EBITDA margin also increased 9 percentage points year-on-year, reaching 0.4 per cent. This improvement signifies enhanced operational efficiency and better utilization of resources. What’s even more remarkable is their commitment to achieving this milestone with a cumulative investment significantly lower than the previously indicated $320 million in August 2022. This shows their strategic acumen in optimizing capital allocation and using funds efficiently to drive profitability.
Zomato Revenue by Segment Q1 FY24
Zomato, an NSE-listed company, drives its revenue from food ordering and delivery through its mobile app Zomato, B2B supplies handled by Hypepure, quick commerce business (Blinkit) and others.
- Zomato’s total adjusted revenue increased 53.9% YoY and 15.5% QoQ to Rs 2,786 crore in FY Q1 2024. Out of this, Rs 2,416 came from operating revenue generated from its core business (food delivery, Hypepure and Blinkit), and the rest Rs 370 crore was customer delivery charges.
- Zomato’s food ordering and delivery business accounted for 56.8% of the company’s total operating revenue in FY Q1 2024. Impressively, this segment experienced robust growth of 27.7% YoY and 17.1% QoQ in revenue, amounting to Rs 1,372 crore during the quarter. The adjusted revenue of Zomato’s food ordering and delivery segment increased 18.5% YoY to Rs 1,742 crore during the June quarter.
- Zomato generated approximately 25.5% of its operating revenue from Hyperpure, amounting to Rs 617 crore during the first quarter of fiscal 2024. The Hyperpure revenue increased an astonishing 126% YoY and 29.1% QoQ during the quarter.
- Zomato’s quick commerce business Blinkit generated Rs 384 crore in revenue during the June quarter, representing 15.9% of Zomato’s total revenue.
The above data shows Zomato generated significant yearly growth in revenues across all segments during the first fiscal quarter of 2024. This growth is driven primarily by an increasing customer base. The average monthly transacting customers of Zomato’s food delivery business increased to 17.5 million in FY Q1 2024, up 4.79% from 16.7 in FY Q1 2023. Additionally, the average monthly active food delivery restaurant partners increased 8.7% YoY, from 208k to 226k during the same period.
Zomato’s Gross Order Value (GOV) from its food delivery business witnessed an impressive growth of 13.9% YoY, surging to Rs 7,318 crore. This substantial increase in GOV highlights the growing popularity and demand for Zomato’s food delivery services during the specified period.
The growth in the customer base, restaurant partners, and GOV clearly indicates Zomato’s expanding influence in the food delivery market, bolstered by its customer-centric approach and seamless platform experience.
As the online food delivery market in India witnesses intense competition, all eyes are on Zomato and its arch-rival, Swiggy. Zomato’s fiscal Q1 2024 results have been nothing short of remarkable, with historic profitability and impressive revenue growth. However, Swiggy’s Q1 2024 and FY23 results are yet to be revealed, leaving the industry eagerly anticipating how it will fare against Zomato.
Who will win the hearts (and stomachs) of India? Will Zomato maintain its upward trajectory and expand its profitability, or will Swiggy rise to the challenge and secure a competitive edge? Let us know in the comment section!