Zomato Q3 net loss narrows to Rs 63 cr; revenue jumps 82%

11 Feb 2022 , 09:53 AM

Net sales rose 82.47% to Rs 1112 crore in Q3 December 2021 over Q3 December 2020.

Pre-tax loss (before exceptional item) stood at Rs 383 crore in Q3 December 2021 as against pre-tax loss (before exceptional item) of Rs 118.40 crore in Q3 December 2020.

During the quarter, the company reported one-time exceptional profit of Rs 315.80 crore.

During the quarter ended 31 December 2021, the Zomato Group acquired the remaining 35.44% stake in Jogo Tecnologies from the remaining shareholders and sold full 100% stake in Jogo Technologies to Curefit Services and Curefit Healthcare for a total consideration of Rs 375 crore.

However, the companys adjusted revenue – on a year-on-year basis, saw a 78 per cent growth in to Rs 1,420 crore. On a sequential quarter-on-quarter basis, it was flat.

Adjusted revenue is the sum of revenue from operations (from all businesses) and customer delivery charges in our food delivery business.

Adjusted EBITDA loss reduced to Rs 270 crore ($36 million) in Q3 FY22 as compared to Rs 310 crore ($41 million) in the previous quarter (Q2 FY22) driven by rationalizing spends across various businesses and functions.

Gross Order Value (GOV) grew by 84.5% YoY and 1.7% QoQ to Rs 5,500 crore ($733 million) in Q3 FY22. The weak QoQ growth in GOV was primarily 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).

Number of orders grew 93% YoY and 5% QoQ. Average order value (AOV, which includes customer delivery charges) shrunk by about 3% QoQ, mostly on account of reduction in customer delivery charges.

Contribution as a % of GOV for Zomatos food delivery business was 1.1% in Q3 FY22 as compared to 1.2% in Q2 FY22.

Zomato continues to benefit from the changes we are helping to drive in the overall restaurant industry.

The consumption of restaurant food has grown manifold in India on the back of higher accessibility, choice and affordability of restaurant food. The restaurant industry in India is highly fragmented with ~90% of the revenue coming from standalone restaurants and only ~10% from chains. In this ecosystem, we have played our part by helping small restaurants level the playing field for themselves and get discovered by new customers.

The company said that average monthly active food delivery restaurants have grown by 6x and average monthly transacting customers have grown by 13x on Zomato over the past 5 years.

The company plans to utilize the $1.7 billion cash on its balance sheet to focus on two key areas of investment?core food businesses and quick commerce.

We made cash investments worth $225 million in the past year across three companies?Blinkit (formerly Grofers), Shiprocket and Magicpin?to reach our objective of building out quick e-commerce in India? Of these, Blinkit is the closest to how we all know the quick commerce business today.

Zomato said it will continue making minority equity investments in businesses that will accelerate growth of its business. The company also said it is in the process of setting-up its own non-banking financial company (NBFC) which will allow it to extend short term credit to its ecosystem – its delivery partners, customers and restaurant partners.

Zomatos technology platform connects customers, restaurant partners and delivery partners, serving their multiple needs. It also operates a one-stop procurement solution, Hyperpure, which supplies high quality ingredients and kitchen products to restaurant partners.

Shares of Zomato were down 4.44% at Rs 90.30 on the BSE.

The stock entered bourses on 23 July 2021. It was listed at a price of Rs 115, a premium of 51.32% to the issue price of Rs 76 per share. The initial public offer (IPO) of online food delivery platform Zomato received bids for 2,751.27 crore shares as against 71.92 crore shares on offer. The issue was subscribed 38.25 times.

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