Zomato has announced its financial results for Q4’24, and from the looks of it, seems to be progressing well on its continued profitability path. The publicly-listed food delivery giant has reported a net profit of ₹175 crore for the fourth quarter (Q4) ending March 31, 2024. This achievement marks the fourth consecutive quarter of profitability for the company.
Zomato’s revenue from operations in Q4 FY24 witnessed a significant increase of 73% year-on-year to ₹3,562 crore, and the firm notes that its year-on-year topline growth rose to 61%. Most of this increase comes in from Blinkit, which has showed continued growth in revenues, despite apprehensions about sustainability of the overall quick commerce sector. Blinkit’s revenue more than doubled year-on-year to ₹769 crore, while its gross order value at ₹4,027 crore grew by 97% annually. Moreover, Blinkit achieved positive adjusted EBITDA in March 2024, signifying a significant milestone in its journey towards profitability. Zomato further emphasized its commitment to quick commerce with an ambitious plan to expand its network of Blinkit stores to 1,000 by March 2025. In addition to this, Hyperpure, its B2B offering focused on restaurant supplies, exhibited promising growth in Q4 FY24 with a 99% year-on-year revenue increase. Similarly, Zomato’s gross order value clocked an annual growth of 51%.
Despite all the rosy numbers that the company has reported, Zomato’s contribution margin, at 7.5%, remains lower than some industry benchmarks. High marketing and promotional expenses associated with customer acquisition are likely contributors for this as well. The company, which had generated immense interest in the public markets over the past few weeks, also failed to meet analyst expectations.This missed target, coupled with the company’s stock being under long-term ASM (Additional Surveillance Measure) due to potential volatility, might explain the muted stock market response. T
he shares of the online delivery aggregator are currently priced at ₹196.65. “We believe that a business built on the back of great service quality is much tougher (and hence more defensible) than just offering lower prices (usually through unsustainable subsidies). We plan to stick to making our service even more reliable and loved for our customers. And just like today, we will strive to maintain an edge over competition for the quality and innovation that we stand for,” the company revealed in its letter to shareholders.
The company, for the immediate future, plans to establish an additional Employee Stock Ownership Plan (ESOP) pool and continue its rapid store expansion from the 26 cities Zomato currently has a presence in to 1000 by March 2025. “Looking ahead, Zomato remains focused on driving sustainable growth and expanding its market presence. The company’s plans to establish an additional Employee Stock Ownership Plan (ESOP) pool and continue its rapid store expansion,” the shareholders’ letter revealed.
