Bengaluru, May 19

Zomato has narrowed its losses to ₹188 crore in Q4 FY23 from ₹345 crore in the previous quarter, and ₹360 crore in the fourth quarter of last year. 

On a consolidated basis, Zomato’s revenue jumped by 70 per cent year-on-year to ₹2,056 crore, compared to ₹1,211.8 crore. Further, the company said its business excluding quick commerce (Blinkit) has turned adjusted EBITDA-positive in Q4 FY23. This was driven by Zomato’s food delivery business generating ₹78 crore of adjusted EBITDA in the quarter. Adjusted EBITDA is defined as EBITDA plus share-based payment expense, excluding rental for the period pertaining to ‘IND AS 116 Leases.’

Going ahead, Zomato is aiming to hit positive adjusted EBITDA (and also PAT) on a consolidated basis (including quick commerce) within the next four quarters. “I would rate our current confidence level at 9/10 on achieving profitability for the entire business within the next four quarters. We are approaching this target by increasing profits in the food delivery business and reducing losses in the quick commerce (Blinkit) business,” Deepinder Goyal, CEO of Zomato. 

Goyal added that the company is looking to further expand the Adjusted EBITDA margin (from the current 1.2 per cent) to its stated goal of +4-5per cent of gross order value (GOV), which would translate to ~Rs 1,000 to 1,300 crores of annual cash operating profit at the current scale of Zomato’s food delivery business.  

On the quick commerce side, Goyal said the company is pleased with the outcomes so far in a short period of time. In the month of March 2023, more than 65 per cent of the GOV of Blinkit was from contribution-positive stores. “A few stores have even crossed the 5 per cent Contribution margin and we expect that to be the case across the mature parts of our network at some point in the future. We believe we are the most cost-efficient and the largest quick commerce business in India today,” he added. 

Further, Zomato’s CFO Akshant Goyal noted that the quarterly growth is low for food delivery because of the demand slowdown the company witnessed in its business from late October last year till the end of January 2023. 

“As we had mentioned in our last letter, we had started seeing green shoots of recovery in the first week of February 2023. That recovery has continued and the business has grown well since then and the same should reflect in better GOV growth in the next quarter. We are expecting QoQ GOV growth to be in the high single digits in Q1 FY24. This could have been higher if not for the industry-wide slowdown that continues to weigh on growth,” the CFO added. 

Leadership Change

Zomato has also appointed new senior executive after multiple exits in the recent past. The company said in a stock exchange filing that it has appointed Rakesh Ranjan as CEO-Food ordering and delivery business, Rinshul Chandra as COO-Food ordering and delivery business and Rishi Arora as CEO-Zomato Hyperpure Private Limited, a subsidiary of Zomato.

“Rakesh, Rinshul and Rishi have been with Zomato/ Blinkit for more than 5 years across various roles. We believe that a change of leadership every now and then with capable people at the helm brings new perspectives to the business enabling it to evolve faster. Such leadership changes are also great for people development, and we are confident that our people strategy will set us up for success even decades from now,” the company added. These appointments are slated to be effective from June 1, 2023 to a period of two years.

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