Zomato management reiterated that the food delivery company is expected to hit profitability over the next six months in its annual general meeting held here on Tuesday.
In its first AGM post listing last year, the founder and key management executives fielded questions over unit economics and share price drop.
Akshant Goyal, Zomato’s chief financial officer of Zomato told shareholders that the company expects the food delivery business to show profits in the next few quarters. “At a company level we should break even in six months to a year… without (excluding) Blinkit which will take a bit longer,” a Moneycontrol report said quoting Goyal.
As reported by Mint in May this year, Goyal has been stressing on working towards profitability. “We want to get to profitability without diluting any more. That’s how we’re thinking about it. With the current $1.6 billion that we have in the bank, we should get to a profitable business on an aggregate basis… on a group basis," Goyal had told analysts during Zomato’s first financial earnings call since it went public.
As investors, both private and public stress for companies to aim for stronger unit economics and work towards profitability, India’s new age economy companies are realigning strategy and holding back on cash burns.
In the earnings call, Zomato’s founder and chief executive Deepinder Goyal had added that the company will try not to spend most of the funds by the time it turns profitable. “In FY18-19, it was largely about acquiring more users who were new to this category," he added. More than 90% of Zomato’s business is from repeat monthly customers. The Ant Group-backed firm incurred a net loss of ₹359 crore in FY22 despite a 75% growth in revenue.
The company has been working towards various new initiatives to bring in horizontal growth. Apart from acquiring grocery delivery startup Blinkit (formerly Grofers), the company has also introduced intercity food delivery services across select cities in India.
Having listed with a bang last year, Zomato’s shares are currently trading at Rs 58.3 per share, a discount of over 20% to the issue price of Rs 76 a share in its initial public offering.