Zomato reports rise in revenue, profit in Q3 FY24
Zomato has announced its financial results for the third quarter of the fiscal year 2024 (Q3 FY24), highlighting significant revenue growth and profitability across its diversified business segments. For the third quarter, the company’s revenue from operations clocked a growth of 15.4% to reach ₹3,288 crore, as compared to ₹2,848 crore in the preceding quarter (Q2 FY24) (also marking an annual growth of 69%).
A closer examination of Zomato’s revenue breakdown reveals the significant contribution of its food ordering and delivery business, which accounted for 51.8% of total operating revenue in Q3 FY24. This segment experienced a notable 10.2% growth, generating ₹1,704 crore in revenue during the quarter. Moreover, revenue from Hyperpure supplies and Blinkit quick commerce vertical contributed ₹859 crore and ₹644 crore, respectively. The recently-ended quarter also marks the first quarter where the quarter from the previous year had Blinkit financials consolidated for the entire quarter. Blinkit also clocked a total of 55.8 million orders delivered in Q3FY24. Furthermore, Zomato bagged ₹219 crore as non-operating income, while its consolidated Adjusted EBITDA was positive for the third consecutive quarter and amounted to ₹125 crore.
For those who need a refresher, Zomato operates a diverse portfolio of business units catering to various segments of the market. In addition to its core food marketplace platform, the company oversees Hyperpure, a farm-to-fork supply chain service catering to restaurants and businesses. Furthermore, Zomato’s quick commerce vertical, Blinkit, facilitates the rapid delivery of essential items to consumers. The company also offers dining and entertainment platforms like Zomato Live.
“One of the things driving the growth of our food delivery business is the fact that our platform is still underserved from a supply standpoint. The monthly active restaurant base on our platform has grown by more than 20% YoY in Q3 FY24,” the company said. Zomato maintained that the entry of new restaurants and the expansion of coverage area of existing restaurants aided in the growth of its food delivery business, while its Zomato Gold programme recorded over 1.8 million sign ups (for reference, Zomato dropped the pricing of its Gold programme). “We are also seeing a lot of customers switching platforms at the time of membership renewal depending on who is offering the lowest price. While there is no debate on the need for a loyalty program, we are yet to get to sustainable pricing here,” Rakesh Ranjan, CEO of Zomato’s food delivery business, commented on the matter.
Despite significant investments in advertisement and promotions amounting to ₹374 crore, Zomato demonstrated effective expense management strategies to optimize profitability. Delivery and related charges surged by 16.2% in Q3 FY24, constituting 31.6% of total expenses, to reach ₹1,068 crore, while ₹374 crore was spent on advertisement and promotions. Purchase of stock (after adjustment of changes in inventories) rose by 16% to amount to ₹782 crore, while employee benefits cost amounted to ₹423 crore for the same period. However, the company achieved a commendable profit margin during the period, while its profits clocked an increase of 3.8 times to ₹138 crore in the third quarter. Similarly, the company’s Gross Order Value (GOV) for its B2C businesses witnessed an annual growth of 47% and a quarterly growth of 13% to amount to ₹12,886 crore. Overall, the company’s total expenses rose 36% year-over-year to ₹3,383 crore compared to the previous year as well.
