The relatively small third quarter loss was helped by a gain, while revenue jumped due to increased demand for restaurant meals.
The company was helped by a one-time gain of ₹316 crore from the sale of its stake in Fitso, an online platform that connects people to sporting venues. Further, Zomato’s dining out business, which offers customers discounts and offers when they eat out at partner restaurants, strengthened as eateries and bars reopened due to a fall in Covid-19 cases during the quarter, while the company’s core food delivery business continued to grow.
Zomato had posted a net loss of ₹429 crore in the previous September quarter.
On Thursday, Zomato shares closed 0.42% higher at 94.60 apiece on NSE.
The company’s gross order value (GOV) grew by 84.5% year-on-year and 1.7% quarter-on-quarter to ₹5,500 crore in the reporting quarter.
GOV is defined as the total monetary value of all food delivery orders placed online on Zomato in India including taxes, customer delivery charges, gross of all discounts, excluding tips.
On a sequential basis, the GOV grew by a marginal 2%, mainly due to reduction in customer delivery charges, in addition to a soft impact of post-Covid reopening (including some shift from delivery to dining out).
Contribution as a percentage of GOV for the food delivery business was 1.1% in the reporting third quarter as compared to 1.2% in the last September quarter.
The customer delivery charges de-grew by 22% and it was driven by ₹7.5 per order reduction in customer delivery charges in Q3FY22 as compared to Q2FY22.
Zomato said it has re-distributed growth investments more in favor of discounts on customer delivery charges via food coupons as it is seeing higher return on investment with discounted delivery charges as compared to coupons. As a result, discounts per order reduced by ₹5 per order in the reporting quarter as compared to Q2FY22.
Revenue from operations rose 82% to ₹1,112 crore for the December quarter as compared to Q2 FY22. as against ₹609 crore reported in the last year.
Adjusted revenue – on a year-on-year basis — saw a 78% growth to ₹1,420 crore, while on a sequential the company saw a flat quarter.
Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) loss reduced to ₹270 crore in third quarter as compared to ₹310 crore ($41 million) in the previous quarter (Q2FY22), driven by rationalizing spends across various businesses and functions.
Zooming out from the current quarter, we remain focused on the bigger picture and the long-term growth potential of our food ordering and delivery business in the years ahead, , the company said in a filing
Zomato said it continues to benefit from the changes it is helping to drive in the overall restaurant industry.
Number of orders grew during the quarter 93% year-on-year and 5% quarter-on-quarter, while the average order value (AOV), which includes customer delivery charges) has shrunk by 3% sequentially, mostly on account of reduction in customer delivery charges.
The food delivery giant said it currently well capitalised with $1.7 billion cash in its balance sheet, and doesn’t envisage raising cash in the foreseeable future.
With this capital, it plans to focus on two key areas of investment in core food business and quick commerce.
In the quick commerce segment, Zomato said it has made cash investments worth $225 million in the past year across three companies – Blinkit (erstwhile Grofers), Shiprocket and Magicpin.
Blinkit has scaled rapidly to $450 million annual run rate GMV (January 2022 annualized) and now operates with 400+ dark stores across 20 cities in India. 100% of Blinkit’s business now is in quick commerce format with a median delivery time of 12 minutes. Delightful customer experience is leading to high customer retention, ordering frequency and willingness to pay for the service, the company said.
The company has also said it will continue making minority equity investments in businesses that will accelerate growth of its business.
Zomato shares have lost 25% since listing amid weakness in the broader market on valuation concerns and expectations for monetary policy tightening by global central banks.
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