Zomato Q2 results: Profit soars 389% to Rs 176 crore, revenue jumps 68%

Zomato Q2 results: The strong bottom-line performance can be attributed to rising food delivery margins and the quick commerce segment, which is nearing break-even.

In Short

• Zomato posts 389% profit growth, reaching Rs 176 crore
• Revenue from operations climbs 68% year-on-year to Rs 4,799 crore
• Quick commerce segment Blinkit reports 129% revenue growth

Online food delivery platform Zomato has announced strong results for the second quarter, with a 389% increase in consolidated net profit, which surged to Rs 176 crore compared to Rs 36 crore in the same period last year. The company's revenue from operations also witnessed substantial growth, climbing 68% year-on-year (YoY) to reach Rs 4,799 crore.

The strong bottom-line performance can be attributed to rising food delivery margins and the quick commerce segment, which is nearing break-even. Zomato's adjusted EBITDA for the quarter soared to Rs 331 crore, up from Rs 41 crore a year earlier.

In terms of gross order value (GOV), Zomato saw a 55% YoY increase across its B2C operations, totalling Rs 17,670 crore in Q2FY25. When accounting for the acquisition of Paytm’s entertainment ticketing business, the GOV growth remained strong at 53% YoY.

Breaking down the segments, Zomato's food delivery division recorded adjusted revenue growth of 21% YoY, amounting to Rs 2,340 crore, with the GOV for this segment also advancing 21% YoY to Rs 9,690 crore. Adjusted EBITDA for the food delivery business jumped 137% YoY to Rs 341 crore, improving margins to 3.5% from 2.6% a year ago.

The quick commerce branch, Blinkit, achieved significant growth as well, with adjusted revenues soaring by 129% YoY to Rs 1,156 crore. The GOV for Blinkit increased 122% YoY to Rs 6,132 crore, although the segment reported adjusted EBITDA losses of Rs 8 crore.

While losses have decreased from Rs 124 crore last year, they have widened from Rs 3 crore in the preceding quarter, resulting in a margin of -0.1%. Zomato mentioned that while many of its stores are profitable with growing margins, overall margin expansion is limited due to ongoing investments in scaling infrastructure.

The dining-out segment performed exceptionally well, with revenues skyrocketing 214% YoY and GOV increasing by 171% YoY for the July-September 2024 quarter.

However, Zomato's cash balance saw a decline of Rs 1,726 crore from the previous quarter, largely due to the Rs 2,014 crore spent on acquiring Paytm’s entertainment ticketing business. To bolster its financial position in a competitive environment, Zomato's board has approved raising an additional Rs 8,500 crore through a qualified institutional placement (QIP).

"While our business has transitioned from loss-making to generating cash since the IPO, we recognize the need to enhance our cash reserves in light of the competitive landscape and our significantly larger scale today," Zomato stated.

Looking ahead, the company has clarified that there are no plans for minority investments or acquisitions in the near term; the upcoming fundraise is strictly aimed at strengthening its balance sheet.

On the stock market front, Zomato shares closed over 3% lower at Rs 256.55 on the NSE following the announcement.