In the second quarter of FY 2024-25, Zomato, the top food delivery service in India, announced excellent financial performance (Q2FY25). The company's consolidated net profit grew to ₹176 crore from ₹36 crore in the same quarter last year, a growth of 389% year-on-year. Profit after tax (PAT) was lower than market forecasts, which had projected a profit of around ₹260 crore despite this impressive growth.
Strong Revenue Growth
Zomato's operating revenue grew 68.5% to ₹4,799 crore in Q2FY25 from ₹2,848 crore in Q2FY24. A rapidly growing commerce sector that is almost on par and rising food delivery margins were the main drivers of this expansion. Total consolidated revenue for the quarter was reported at ₹5,020 crore, marking a 64% year-on-year growth.
Enhanced Operational Metrics
At ₹331 crore, Zomato’s adjusted profit before interest, tax, depreciation, and amortization (EBITDA) grew dramatically from ₹41 crore in the previous year. The company’s dedication to driving operational effectiveness and profitability is demonstrated by this improvement.
In Q2FY25, Zomato’s business-to-consumer (B2C) segments’ gross order value (GOV) grew 55% year-on-year to ₹17,670 crore. When the effects of the acquisition of Paytm’s entertainment ticketing division were taken out of the equation, the GOV growth rate was 53% year on year.
Segment Performance
Regarding sector performance, Zomato's food delivery division reported ₹2,340 crore in adjusted revenue, a 21% year-over-year increase. To ₹9,690 crore, the GOV for this segment grew by 21%. Additionally, the food delivery segment's adjusted EBITDA increased 137% year over year to ₹341 crore, with margins expanding to 3.5% from 2.6% the year before.
However, Zomato's rapid commerce division, Blinkit, showed remarkable development, with adjusted revenues reaching ₹1,156 crore, up 129% year over year. Additionally, the GOV for Blinkit increased by 122% annually to ₹6,132 crore. Even yet, the business continued to encounter difficulties, reporting an adjusted EBITDA loss of ₹8 crore, which was better than the ₹124 crore loss from the year before.
Strategic Moves Ahead
Zomato's board of directors has authorised a capital raise of up to ₹8,500 crores through a qualified institution placement (QIP), which is a notable move. It is anticipated that the move will strengthen the financial position of the business and aid its continued growth initiatives.
Market Reaction
Anyway the favourable financial results, Zomato share price fell 3.58% to ₹256.20 on the Bombay Stock Exchange (BSE) after the news was released. According to analysts, the stock has broken below previous support levels and is currently under negative pressure.
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