After a rather disappointing first few quarters following its IPO due to ballooning losses and a dwindling stock price, Zomato now has reason to celebrate.The food delivery and restaurant aggregator¡¯s consolidated net loss has nearly halved to Rs 250.8 crore in the July-September quarter from the mammoth amount of Rs 434.9 crore in the same period last year.
Zomato's revenue from operations increased 62% year on year to Rs 1,661.3 crore in the last quarter. The company also reported total adjusted revenue growth of 48% year on year to Rs 2,107 crore, translating to an annualised revenue of $1.05 billion?(at an average exchange rate of $1 = Rs 80) in the quarter. For the uninitiated, adjusted revenue is revenue from operations plus customer delivery charges.
¡°This is the first quarter where we have crossed the billion-dollar annualized revenue mark,¡± the company said, as per ET report..
Zomato's stock price?surged 13%?today?on the back of strong results and is up over 15% this week; however, it's still down around 48% this year.??
Sharing his views,?Zomato's co-founder and CEO, Deepinder Goyal?has said that even though its food delivery business was growing and moving towards profitability, there was room for faster business growth.
"I don¡¯t know if I can attribute this to the macro environment¡ªprimarily because I know for a fact that we could have innovated and executed better in the last couple of months," Goyal said, as per the report.
Commenting on whether the focus on profitability was affecting growth in the food-delivery business, CEO Goyal said the company was focusing on better unit economics.
"We have strategically chosen to trade low-quality growth for better unit economics. That¡¯s part of our long-term strategy to build a high quality, high growth business. At the same time, we are not shying away from investing in high-quality compounding growth. We also continue to invest in long term capability building, as well as market expansion initiatives like Hyperpure, Zomato Instant, and Intercity Legends, etc.," he said.
Food delivery?is the largest revenue segment for Zomato. In the quarter ended September 30th, revenues from the India food ordering and delivery business accounted for 68% of Zomato's consolidated revenue from operations.?
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Zomato had recently rolled out Zomato Pay in several cities, including Delhi, Mumbai, Bengaluru, Ahmedabad, and Kolkata. Through Zomato Pay, customers can make payments at partner restaurants from the Zomato app.
¡°The new experience is already live in 12 cities in India and UAE. The feedback so far is good (not great ¡ª iterations still required), and we expect to scale this rapidly and make it the go-to dining-out platform for our restaurant partners and customers,¡± CEO Goyal had said, as per the report.
During the June-September quarter, Zomato also completed the acquisition of quick-commerce platform?Blinkitand has reported a loss of Rs 119.2 crore for its quick-commerce segment for 50 days of the quarter from August 10 (when the deal was closed) till September 30.
Zomato CEO Goyal said the company¡¯s hypothesis on customer adoption and the core business model of Blinkit were "playing out well."
¡°So far, I am very happy with the Blinkit acquisition. As we see this business more closely, our level of excitement has only increased. Our hypothesis seems to be playing out on both strong customer adoption as well as the core economic model,¡± he said, as per the ET report. ¡°I know that most investors currently ascribe zero value to the Blinkit business, and that¡¯s understandable. But I am confident this will change in due course of time.¡±
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With the purchase of Blinkit in August,?Zomato now has its "plates full" and has planned no further minority investments, its Chief Financial Officer, Akshant Goyal, reportedly said.
Zomato?has been on the lookout for new and potentially large growth ideas for the long term growth of its business, he added.
"For example,?Intercity Legends?(intercity food delivery), and?Zomato Instant?(food delivery in 10-15 minutes); but these are innovations within the "food delivery" business, and are relatively low investment initiatives. Any capital used by these two initiatives will be well within our overall capital allocation plan for the food delivery business," he said.
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