Zomato, the Indian food delivery unicorn, today reported its second consecutive profitable quarter. With an EBITDA of ₹41 crore for Q2’FY24, this was a massive ₹233 crore improvement over the same quarter in previous year. This is the second time it is reporting a profit, with a surprising ₹2 crore profit reported in previous quarter. All other numbers looked encouraging, except maybe the Average order value, which remained largely flat.
“The growth momentum we witnessed in Q1FY24 continued in Q2FY24 driven by healthy growth across all our businesses”, said CEO and Founder Deepinder Goyal during an earnings release.
Gross order values or GOVs saw an increase across all brands, largely due to an increase in order volume. GOV across B2C businesses (food delivery + quick commerce + Going-out) grew 13% QoQ/ 47% YoY. Food delivery GOV grew 9% QoQ/ 20% YoY and seems to have recovered well from the demand slowdown in the last two quarters of FY23. Quick commerce bounced back with a 29% QoQ GOV growth following tepid growth in Q1FY24 (due to temporary disruptions in the business).
Zomato’s shares, at the time of closing for the day, ended a record 9.72% higher as these encouraging numbers started coming in. Analysts are expecting further rally in company’s stock price.
Adjusted Revenue grew 16% QoQ and 53% YoY. Goyal adds, “In our last shareholders’ letter, we had mentioned that we expect our Adjusted Revenue to compound at a 40%+ growth rate over the next couple of years and we remain on track to deliver on that outlook. Our YoY Adjusted Revenue growth has been comfortably above 40% even in the past 8 quarters wherein the food business (excluding quick commerce) growth has been 30%+”.
In EBITDA terms, the company reported a profit of ₹41 crore, compared with ₹12 crore in the previous quarter (Q1FY24) and a loss of ₹192 crore last year same quarter (Q2FY23). The profit once agains seems contrary to street expectations, with analysts suggesting a loss of ₹5 crore for the recent quarter.
With the 2023 cricket World Cup happening in India, and the craze taking over the entire nation, Zomato is expecting some spike in orders.
“While people order a lot during festivals, they also travel and eat-out a lot more. The World Cup should result in additional orders, but we think that would also be limited to a handful of matches,” it said.
During the quarter, the company’s cash balance increased by Rs 188 crore.