 |
|
Zomato, the leading food delivery platform in India, has reported a significant surge in its net profit for the second quarter (Q2) of the fiscal year 2025. The company's consolidated net profit witnessed a 389% year-on-year (YoY) growth, reaching Rs 176 crore, compared to Rs 36 crore in the same period last year. However, the profit fell short of market expectations, which had predicted a net profit of Rs 260 crore.
This impressive profit growth was fueled by a consistent increase in margins from the food delivery business and the continued near-break-even performance of the quick commerce business. The revenue from operations also saw a remarkable jump, rising 68% YoY to Rs 4,799 crore in the reporting quarter. This indicates a strong underlying performance across Zomato's core business segments.
The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also experienced a significant leap, rising to Rs 331 crore in Q2FY25, compared to Rs 41 crore in the same period last year. This robust performance in EBITDA reflects the company's ability to effectively manage costs and generate strong operational efficiency.
Delving into segment-specific performance, the food delivery business recorded an adjusted revenue growth of 21% YoY, reaching Rs 2,340 crore. The gross order value (GOV) for this segment also advanced by 21% YoY to Rs 9,690 crore. Notably, the adjusted EBITDA for the segment surged 137% YoY to Rs 341 crore, indicating a significant improvement in profitability. The food delivery business's margins expanded to 3.5% in Q2, up from 2.6% in the corresponding quarter last year.
Zomato's quick commerce business, Blinkit, also showcased substantial growth. Adjusted revenues for Blinkit rose 129% YoY to Rs 1,156 crore, while the GOV increased 122% YoY to Rs 6,132 crore. However, the adjusted EBITDA remained negative at (-Rs 8 crore), although the losses have decreased from Rs 124 crore a year ago. While most of Blinkit's stores are profitable, the company is investing in scaling infrastructure, leading to a slight widening of the overall EBITDA losses compared to the previous quarter. The margins for the segment currently stand at -0.1%.
In a strategic move to strengthen its balance sheet amidst a highly competitive market, Zomato's board approved a qualified institutional placement (QIP) to raise an additional Rs 8,500 crore. The company highlighted its need to enhance its cash balance, particularly considering the larger scale of its operations and the competitive landscape. Zomato clarified that there are no plans for any minority investments or acquisitions in the immediate future, and the fundraise is solely focused on bolstering its financial position.
Despite the positive performance, Zomato's shares closed over 3% lower at Rs 256.55 on the National Stock Exchange (NSE) on Tuesday. This decline may be attributed to factors such as the missed earnings estimates and investor sentiment regarding the company's financial strategy.
Source: Zomato Q2 Results: PAT skyrockets 389% YoY to Rs 176 crore; revenue zooms 68%