News

Published: May 20, 2023
Updated: May 20, 2023

Zomato Targets Profitability as Consolidated Loss Narrows in Q4

Food delivery platform Zomato has reported a significant narrowing of its consolidated net loss for the quarter ended March, reaching ₹188.2 crore. This improvement comes as the company's overall revenue surged by 70%. Zomato now aims to achieve positive adjusted EBITDA and net profit on a consolidated basis, including the operations of BlinkIt, within the next four quarters.

Improving Financial Performance

Zomato's consolidated net loss for the same period last year amounted to ₹359.7 crore. The company has seen a sequential decrease of approximately 46% in losses, as indicated in its latest regulatory filing. The recent quarter's growth was affected by a demand slowdown from late October until the end of January. However, Zomato's founder and CEO, Deepinder Goyal, noted that the first week of February marked the beginning of a recovery.

Revenue Growth and Business Segments

Zomato's revenue from operations for the last quarter reached ₹2,056 crore, compared to ₹1,211.8 crore in the corresponding quarter of the previous year. The company's food delivery business has been a key driver of profitability, generating an adjusted EBITDA of ₹78 crore in the March quarter. Additionally, Zomato's adjusted revenue from the food delivery arm stood at ₹1,530 crore, although it experienced a slight decline due to the slowdown in the overall food delivery space.

Other segments of Zomato's business, such as Hyperpure and BlinkIt, also contributed to its financial performance. The business-to-business arm, Hyperpure, reported adjusted revenues of ₹478 crore, while BlinkIt brought in ₹363 crore.

Future Plans for Profitability

Zomato aims to expand its food delivery business by increasing the adjusted EBITDA margin from its current 1.2% to a target range of 4-5% of gross order value (GOV). This would translate to approximately ₹1,000 to ₹1,300 crores of annual cash operating profit at the current scale of the food delivery business, according to Goyal.

Though profitability still a daunting task to achieve

Zomato's latest financial results indicate a positive trend, with a significant reduction in net losses and a considerable increase in overall revenue. The company is now focused on achieving profitability over the next four quarters. Zomato's success in its food delivery business and its plans for expanding the adjusted EBITDA margin demonstrate its commitment to improving its financial position.