After More Than 50% Drop In Share Price This Year, Zomato's Net Loss Triples To ?360 Crore In Q1 Of 2022

Ever since Zomato went public and its shares got listed in July 2021, the stock price has been riding a rollercoaster.

After a stellar stock market debut when the stock opened at over 50% premium on both NSE and BSE, the stock enjoyed an all-time high price of ? 169.10 on November 16, 2021. And then, the stock has also witnessed a crash and plunged to an all-time low in February 2022.

Amid this rollercoaster ride and disappointment for Zomato's IPO investors come the latest financial results of the company.

Zomato saw its net loss widen to ?359 crore in Q4 of FY22 (Jan-March 2022), which indicates that the loss tripled from the ?134 crore mark of Q4 FY21.

But the silver lining is that Zomato's consolidated revenue from operations rose 75% to Rs 1,212 crore as against Rs 692 crore in the same quarter of the previous financial year.

Zomato CEO Deepinder Goyal has said that the company is being aggressive about conserving cash, whereas CFO Akshant Goyal, commenting on the capital allocation plan, said ¡°We have about $1.6 billion unrestricted cash at this point. Our capital needs are currently limited. Losses in the core food business are reducing rapidly, as we mentioned earlier. The minority equity investments that we wanted to do are done.¡±, as per a report in TheHinduBusinessLine.

Commenting on whether Zomato plans to acquire Blinkit, CEO Goyal said, ¡°The company has committed to giving the quick commerce company a short term loan of up to $150 million to fund its short term capital needs. Beyond that, there is nothing to share at this moment,¡±

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Also Read: Zomato CEO Pledges Rs 700 Crore Towards Education Of Delivery Partners' Children

Investment plan

In the last quarterly letter, Zomato had given an upper bound of $400 million investment in quick commerce in the next two years (CY22 and CY23).

¡°As of now, we are on plan to stick to this outer limit. We are not planning to make any new minority investments as part of this $400 million outer limit set out for quick commerce. Think of this as the max amount of losses we may need to fund in this period of time in the quick commerce business, if and when we fully get into it,¡± the CFO added, as per a report in TheHinduBusinessLine.

Fuel price rise a concern

¡°Increase in fuel prices increased our delivery cost. One could say that part of our progress on improving contribution margin is getting pulled back because of fuel price increase, as we haven¡¯t yet fully passed on the incremental cost to customers,¡± CEO Goyal reportedly added.

The substantial cuts in fuel prices, he hoped will reduce inflation, and reduce costs for a number of businesses, including Zomato.

Also Read: Swiggy Eyes $800 Million IPO In Early 2023

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