Zomato Q1 results: Consolidated loss narrows to ₹186 cr, revenue rises over 67%

Online food delivery platform Zomato has reduced its consolidated loss to 185.7 crore in the quarter ended June 30, 2022 (Q1FY23) compared to a loss of 356.2 crore in the same quarter last year. The company recorded a loss of 359.7 crore in the previous quarter. These losses are attributable to the owners of the company. Front end sales lifted overall financial performance in the first quarter. The consolidated turnover amounted to 1,413.9 crore in Q1FY23 up a whopping 67.44% from 844.4 crore in Q1 of last year and also up 16.68% from 1,211.8 crore in Q4FY22.

On the topline, Akshant Goyal, Zomato’s Chief Financial Officer said: “Sales growth was driven by a) ~10% qoq growth in gross order value (“GOV”) to 64.3 billion in Q1FY23 and b) revenue growth per order. In turn, GOV growth was driven by robust order volume growth and slight growth in average order values ​​compared to the previous quarter.”

The company recovered losses in food delivery. Overall, the adjusted loss in EBITDA decreased to 150 crore in Q1FY23 vs 220 crore in Q14FY22 and 170 crore in Q1FY22.

Akshant added: “In terms of profitability, the food delivery business reached a significant milestone last quarter by reaching Adjusted EBITDA breakeven. Contribution as % of government increased to 2.8% in Q1FY23 compared to 1.7% in Q4FY22 thanks to improvements on both the cost and revenue side, as we have indicated in the past.”

The founder and CEO of Deepinder Goyal of Zomato said: “The real driver here is focus and mindset. Our focus on profitability has sharpened in recent months with the change in the market context, without compromising our focus on growth. We do that by assessing everything with a critical lens and allocating resources by having a long-term view of both sustainable growth and profit.”

Deepinder expects customers who transact monthly will likely drive the company’s growth. He said: “If you compare Q1FY23 to Q1FY22, the average number of customers transacting monthly has increased by 36%, while the average monthly order frequency has also increased by 10% over the same period,” he added: “The growth The number of customers transacting monthly will be a function of a higher recurrence rate from Zomato’s existing customer base (50+ million annual transactions with customers in FY22) and the addition of new customers that remains robust.”

The CEO also expects hyperpure to become a much bigger company than just supplying restaurants. He said: “The cost of food and supplies is typically 25-30% of a restaurant’s revenue. Broadly speaking, this means that Hyperpure’s addressable market also accounts for about 25-30% of restaurants’ food consumption in India. if we limit our presence to the top 20 cities here, that translates into a very large addressable market.”

“In addition, as we move forward, Hyperpure could become a much bigger business than just supplying restaurants. As we expand into fast commerce, the capabilities we’ve built into Hyperpure will also come in handy. So there’s a long runway.” for growth here,” Deepinder added.

Furthermore, Akshant believes that Zomato could achieve a steady-state EBITDA margin of 5-10% in hyperpure business. He said: “Our more mature cities like Bangalore are already moving towards break-even EBITDA. We expect continued improvement in margins due to economies of scale, operating leverage and improvement in gross margins.”

Akshant gave an update on the deal with Blinkit, saying: “We have received shareholder approval for the transaction. 97%+ votes were in favor of the transaction. We are now awaiting approval from the exchanges. Blinkit financial data will begin will be consolidated in Zomato’s consolidated financial statements after closing.”

Zomato shares closed on BSE 46.35 each down 1.07%. The company’s market capitalization is around 36,494.39 crores.

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