Zomato Ltd. (NSE: ZOMATO) has recently unveiled its financial results for the first quarter of fiscal 2025, ending June 30, 2024, and the numbers are nothing short of extraordinary. India’s online food delivery giant has been witnessing phenomenal growth in revenue and profit, making investors increasingly optimistic about its future. Zomato’s revenue increased a strong 74.1% YoY and 18.1% QoQ in Q1 FY25, reaching an all-time high of ₹4,206 crore. What’s even more noteworthy is that the June quarter marked Zomato’s fifth consecutive quarter of profitability.
Zomato’s net profit for FY Q1 2025 soared an eye-popping 12550% YoY to ₹253 crore. This is a significant jump from just ₹2 crore reported in the same period last year when the company first achieved profitability. Compared to the previous quarter, the food delivery company’s profit increased 44.6% in the June quarter.
To truly understand Zomato’s success, it’s essential to examine the revenue generated from its various segments and how the company managed its expenses during the first quarter of fiscal 2025.
Zomato Revenue from Segments & Expenses Q1 FY25
Zomato generates revenue from food delivery, B2B supplies handled by Hypepure, quick commerce business (Blinkit), Going-out and other businesses.
In Q1 FY25, Zomato’s total adjusted revenue grew 62.2% YoY and 16.7% QoQ to ₹4,520 crore.
One must note that this “adjusted revenue” encompasses the revenue from segments, including actual customer delivery charges paid in the food delivery business (net of any discounts, including free delivery discounts on account of the Zomato Gold program) and platform fee paid in the food delivery business (that are not already included in the total Revenue).
- Food delivery: Zomato’s food delivery, the cornerstone of Zomato’s business, accounted for 49.9% of the total adjusted revenue and 53.6% of the company’s total operating revenue in Q1 FY 2025. The adjusted revenue from the food delivery segment increased 29.5% YoY to ₹2,256 crore during the quarter.
- Quick commerce (Blinkit): Zomato’s adjusted revenue from Blinkit surged 145.3% YoY to ₹942 crore during the first quarter of fiscal 2025. The segment accounted for a little more than 20% of the company’s total adjusted and total operating revenue.
- Going-out: Zomato’s going-out business – dining, events and ticketing – is flourishing like never before. The company generated ₹95 crore in adjusted revenue during the June quarter of FY25, with an impressive 126.2% YoY growth. This segment, catering to dine-in experiences and events, has benefited from the resurgence of social gatherings.
- B2B supplies (Hyperpure): Zomato’s adjusted revenue from Hyperpure grew 96.4% YoY in Q1 FY25, amounting to ₹1,212 crore – representing more than a quarter of the company’s total revenue.
To achieve such remarkable double and triple-digit growth across all segments, Zomato spent a whopping ₹4,203 crore in operating activities, a 60.9% YoY jump during the first quarter of fiscal 2025. If we do the math, Zomato spent ₹0.99 to earn ₹1 in Q1 FY25, demonstrating efficient cost management.
A Feast for Investors: Zomato’s Gross Order Value
Zomato’s Gross Order Value (GOV), a crucial metric indicating customer spending, increased an impressive 53.4% YoY growth, reaching an all-time high of ₹15,455 crore in Q1 FY25. Sequentially, the GOV grew 14.2% during the quarter.
Zomato’s GOV in the food delivery segment surged a mouthwatering 26.6% YoY and 9.8% QoQ during Q1 FY25. This growth was primarily driven by a surge in order volumes. This segment remained a major revenue driver, accounting for 59.9% of Zomato’s total GOV during the fiscal first quarter, reaching ₹9,264 crore.
Blinkit also played a crucial role in Zomato’s performance in Q1 FY25, contributing 31.9% to the company’s total GOV with ₹4,923 crore during the June quarter of fiscal 2025. The growth figures are even more noteworthy, 130% YoY and 22.2% QoQ.
The demand for the quick delivery of groceries has dramatically increased in India in recent years, benefiting companies like Zomato’s Blinkit, Swiggy’s Instamart and Zepto. As a result of this growing demand, Blinkit aims to increase the number of dark stores from 639 as of June 2024 to 2,000 by the end of 2026.
Zomato’s GOV from Going-Out business grew 105.8% YoY and 18.6% QoQ to ₹1,268 crore during the last quarter. The recent announcement of the standalone “District” app is expected to further boost this segment’s performance. Zomato is also in talks with Paytm to acquire its ticketing business for approximately ₹1,600-1,750 crore ($190-210 million).
Zomato’s shares were trading at ₹262.74 on the NSE, surging over 12% on August 2, 2024. The year-to-date (YTD) gain in Zomato’s stock price stands at 111%.
All the above growth data indicate that Zomato is doing exceptionally well in India’s online food delivery market, making it a formidable challenge for rivals like Swiggy to dethrone it anytime soon. The company’s fifth consecutive profitable quarter, despite increased expenses, is a testament to its resilient business model and effective strategies.
