Zomato Ltd.'s second quarter profit rose, marking the second consecutive profitable quarter on a consolidated basis.
Net profit rose eighteenfold to Rs 36 crore in the quarter ended September, as compared with the Rs 13.8 crore consensus estimate of Bloomberg analysts.
Zomato Q2 FY24 Earnings Highlights (Consolidated, QoQ)
Revenue up 17.9% at Rs 2,848 crore vs Rs 2,416 crore (Estimate: Rs 2,559.3 crore).
Ebitda loss at Rs 47 crore vs Rs 48 crore.
Net profit up 18 times at Rs 36 crore vs Rs 2 crore (Estimate: Rs 13.8 crore).
"The growth momentum we witnessed in Q1 FY24 continued in Q2 FY24 driven by healthy growth across all our businesses," Chief Executive Officer Deepinder Goyal said in a shareholders' letter alongside earnings. "Gross order value across our B2C businesses (food delivery + quick commerce + going-out) grew 13% QoQ."
Food delivery gross order value rose 9% sequentially and is recovering well from the demand slowdown witnessed in the last two quarters of fiscal 2023, Goyal said.
Gross order value growth was almost entirely led by growth in order volume, while the average order value remained largely flat, he said.
"A visible uptick in demand coupled with some great execution by the team led to the robust growth in order volumes. Order volume growth is typically negatively impacted in this quarter due to lower delivery partner availability during rains. However, this year we were able to improve on that through better all-round execution," he said.
Goyal said Zomato's Gold programme is also witnessing adoption, which is continuing to drive higher ordering frequency among members. "We now have 38 lakh members (as at the end of Q2 FY24) that contribute 40% of GOV in the food delivery business."
However, a Gold order currently is leading to margin dilution, as compared with a non-Gold order. "However, that gap is starting to (and should continue to) narrow, driven by efficiencies across both pricing and cost of the program," Chief Financial Officer Akshant Goyal said.
The company also added that starting Q2, all orders will be charged with a mandatory platform fee of anywhere between Rs 2 and Rs 5. "It is a small fee to make our economics better and viable in the long run," Akshant said.
Shares of Zomato ended 9.5% higher at Rs 117.75 apiece on Friday, as compared with a 0.4% rise in the benchmark Sensex.
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