Zomato Ltd. has showcased remarkable growth in its Q2 FY24 earnings, defying estimates and registering a profit of Rs 36 crore, an impressive eighteenfold leap compared to the previous quarter. Revenues surged 17.9% sequentially to Rs 2,848 crore, outstripping the estimated Rs 2,559.3 crore.
Zomato Q2 FY2024 Results: Key points
- Zomato’s consolidated net profit was Rs 36 crore, contrasting sharply with a net loss of Rs 251 crore a year ago.
- The company’s revenue showed a significant increase of 71.5% compared to the same period last year.
- The company’s acquisition, Blinkit (previously known as Grofers), achieved a positive contribution for the first time in Q2 FY24. This positive turn was attributed to the low base effect from disruptions in the previous quarter. Blinkit’s contribution margin improved from -7.3% in Q2 FY23 to +1.3% in Q2 FY24.
- Zomato’s gross order value (GOV) across all B2C platforms saw an increase of 13% QoQ and a robust growth of 47% YoY.
- Blinkit’s performance has been particularly commendable, with the platform registering a GOV growth of 86% YoY, driven mainly by same-store sales growth.
Deepinder Goyal, Zomato’s CEO, emphasized the company’s growth momentum, driven by “healthy growth across all our businesses”. He noted the promising growth trajectory of Blinkit, stating its potential to surpass Zomato’s GOV in overlapping cities due to its remarkable YoY growth.
Blinkit also added 28 new stores this quarter, bringing the total to 411. Albinder Dhindsa, Blinkit’s CEO, attributes the growth to serving a broader range of customer needs and maintaining consistent service levels.
The integration of Blinkit into Zomato’s ecosystem has shown significant promise. Only a few months after the acquisition, the company is already optimistic about the future growth of Blinkit. Goyal expressed in a shareholders’ letter his belief that, in a decade, Blinkit might drive more value for shareholders than Zomato itself.
Zomato’s financial strategies are evolving as well, with the introduction of a mandatory platform fee on all orders, aiming for long-term economic viability.
The acquisition of Blinkit, completed in August 2022, cost Zomato Rs 4,447 crore. As part of the acquisition, major shareholders like SoftBank, Tiger Global, BCCL, and South Korean investor DAOL received shares in Zomato.
With an optimistic outlook for the next quarter, especially with the festive season approaching, Zomato is poised to further its growth and market presence.
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