Zomato Ltd said its fiscal second-quarter loss narrowed from a year ago on a sharp rise in its income from food delivery and its wholesale Hyperpure unit.
Net loss narrowed to ₹251 crore for the quarter ended 30 September from ₹430 crore a year ago, the company said. Revenue from operations rose by 62% to ₹1,661 crore from ₹1,024 crore. The earnings include about 50 days of Blinkit’s financials, as Zomato’s acquisition of the quick delivery company was completed in August.
“While our food delivery business has been growing and steadily moving towards profitability, I believe there is room for the business to grow much faster than what it is currently trending at,” Zomato’s chief financial officer Akshant Goyal said in a letter to shareholders.
Zomato’s share price dropped 2.53% to ₹63.65 on Thursday.
The Gurugram-based company’s adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) loss narrowed to ₹192 crore from ₹310 crore in the year earlier. It calculates adjusted Ebitda by adding share-based payment expenses and reducing the rental paid for the period.
Adjusted revenue from food delivery operations jumped 27% to ₹1,581 crore from ₹1,248 crore in the year earlier. Average monthly transacting users increased to 17.5 million from 15.5 million in the same period last fiscal.
Zomato’s food delivery business turned adjusted Ebitda positive for the first time in the September quarter. “On the profitability front, contribution margin as a percentage of gross order value improved meaningfully from 2.8% in Q1 FY23 to 4.5% in Q2FY23. As a result, the food delivery adjusted Ebitda hit break-even in Q2FY23,” Goyal said.
“The increase in contribution margin is driven by improvements on both cost and revenue side…This has been the result of scale and heightened focus on profitability over the last few quarters,” he added.
However, the average number of active restaurant partners dropped marginally to 207,000 from 208,000 in the June quarter. In the year-ago September quarter, the number stood at 170,000.
Zomato’s business-to-business (B2B) supplies vertical Hyperpure tripled its adjusted revenue to ₹334 crore in the quarter. Adjusted Ebitda loss for the segment widened to ₹53 crore.
Blinkit gross order value jumped 26% quarter-on-quarter to ₹1,482 crore. The vertical’s adjusted revenue surged 44% quarter-on-quarter to ₹236 crore while adjusted Ebitda loss reduced to ₹259 crore.
The company’s revenue from Zomato Pro dropped significantly to ₹9 lakh, as the company discontinued its dining-out and membership platform in the previous quarter to focus on loyalty programmes.
“Over the past few quarters, especially in the last quarter, the revenue from dining-out has fallen substantially,” Zomato’s chief executive Deepinder Goyal said in the letter.