India's Zomato posts first-ever profit earlier than expected
INDIA’S Zomato posted its first-ever profit on Thursday (Aug 3), one quarter earlier than expected, helped by a tax gain and strong orders in its food and grocery delivery businesses.
Shares of Zomato went up as much as 3.9 per cent after the results.
Zomato expected to hit this milestone in the September quarter, said chief financial officer Akshant Goyal, adding that they were being conservative with that guidance.
Zomato expects its business to remain profitable while delivering a 40 per cent year-on-year topline growth for at least the next couple of years, he said.
Gross order value (GOV) – the total value of all orders, a percentage of which Zomato gets as revenue – rose 13.9 per cent in its food delivery business.
GOV for its quick-delivery business Blinkit surged 82.6 per cent in the quarter year on year, growing 4.6 per cent sequentially. It faced a temporary business disruption in April resulting from a change in the payout structure for delivery partners.
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“We faced a challenging period of around 45 days, when the number of overall gig workers available to work in our system was 15 per cent to 20 per cent lower than normal”, said Albinder Dhindsa, Blinkit’s chief executive officer.
Zomato bought Blinkit last June for 44.5 billion rupees (S$721.1 million) in response to the fierce competition in the quick-delivery market.
“Blinkit’s GOV is very close to Zomato’s GOV in some of the large cities, where we have an overlapping presence,” said Goyal.
The Gurgaon-based company posted a consolidated net profit of 20 million rupees for the quarter ended Jun 30, compared to a loss of 1.9 billion rupees a year ago.
Zomato had a deferred tax gain of 170 million rupees this quarter.
Revenue from operations rose 70.9 per cent to 24.2 billion rupees in the quarter, beating analysts’ estimates, according to Refinitiv IBES data. REUTERS
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