Food delivery platform Zomato, which battles with Swiggy, has showcased an impressive financial performance in the third quarter of the fiscal year 2023-24 (Q3FY24).
The company reported a net profit of Rs 138 crore, marking a significant turnaround from a net loss of Rs 347 crore in the same quarter last year.
The profit surge of 283% is attributed to increased demand during the Cricket World Cup and the festive season. Revenue also saw a substantial rise, with a 69% year-on-year (YoY) increase to Rs 3,288 crore.
Operational highlights and market expansion
The company's Gross Order Value (GOV) experienced a robust growth, with food delivery GOV growing by 27% YoY. The quick commerce segment, under the Blinkit brand, saw a remarkable 103% YoY growth, while the Going-out GOV soared by 154% YoY.
Zomato's strategic expansion has been further highlighted by the addition of 40 new stores to Blinkit, taking the total count to 451. The company's focus on enhancing its Gold Membership program and introducing a platform fee for all customers, including Gold members, has contributed to margin improvement, as per the company's statement.
Zomato said that its quick commerce and food delivery segments have both shown impressive performance. The quick commerce division, particularly Blinkit, doubled its GOV, driven by a surge in demand during multiple festivals and occasions in the quarter.
The food delivery business also saw significant growth, with a 48% increase in revenue for the quarter. The company's B2B supplies under Hyperpure reported adjusted revenue of Rs 859 crore, up from Rs 421 crore in the same quarter a year ago.
Focused on expanding supply base
Deepinder Goyal, Zomato's Managing Director & CEO, expressed optimism about the company's future, expecting the GOV to continue growing at 20%+ YoY. The company's strategic focus remains on expanding its supply base, with the monthly active restaurant base on the platform growing by 20%+ YoY in Q3FY24.
The company is also exploring the potential for a hike in platform fees as part of its long-term strategy to optimize growth and margin expansion.
Zomato's cash balance
Despite the remarkable performance, Zomato's CFO, Akshant Goyal, indicated that the company has no immediate plans for cash return to shareholders, emphasizing the importance of maintaining a strong balance sheet.
Zomato has a cash balance of over Rs 12,000 crore as of the end of the December quarter.
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