Online food delivery platform Zomato Ltd is targeting to achieve the breakeven level between the fourth quarter of this fiscal and the second quarter of FY24, according to company CFO Akshant Goyal. In an analyst call, Goyal said the Zomato business was already positive on cash flow with its adjusted EBITDA losses at ₹150 crore and other income was ₹170 crore in the first quarter of the ongoing fiscal. Zomato had reported Q1 earnings on 1 August.
Zomato shares have rallied 20% since reporting its Q1 earnings. In the June quarter, the Ant Group-backed company recorded more orders and narrowed its losses in the June quarter. Zomato posted a quarterly loss of ₹186 crore, compared with a loss of ₹356 crore.
Revenue from operations, which mostly comes from its mainstay food delivery and related fees it charges restaurants for using its platform, rose 67% to ₹1,414 crore in the three-month period ended 30 June.
Gross order value - or the total value of all food delivery orders placed online on Zomato's platform - rose 41.6%, and the company said its adjusted EBITDA for the food delivery unit broke-even for the quarter.
"So, in some ways, we are not losing cash in that business anymore...we got to adjusted EBITDA breakeven in the food delivery business," Goyal said.
The next milestone, he said, "is to get the overall Zomato business to adjusted EBITDA breakeven and we think we are close now."
In terms of timeline, he said, "Internally, we are aiming to get there by quarter four of this fiscal year. That is the internal goal that we have as a team but we think that if we slip on that, it should not be later than Q2 FY24, which is September 2023 quarter for getting to breakeven on adjusted EBITDA at the Zomato level."
On the instant delivery service Blinkit, Goyal said, "I think the business has surpassed our expectations so far in terms of growth as well as loss reduction to where we were 6-7 months ago. Given where the business is today and the path forward that we see, we think we should get that business also to break even with an investment of $320 million starting January 2022."
In terms of the breakeven timeline on Blinkit, he said: "We don't have that kind of visibility that we have on the Zomato business. So, I would not venture into estimating by which quarter we get there."
Replying to a query, he said losses at Blinkit are also coming down and it should continue going forward post the transaction as synergies kick in.
In June this year, Zomato announced that it would acquire Blink Commerce Pvt Ltd (formerly known as Grofers India Pvt Ltd) for a total purchase consideration of ₹4,447.48 crore.