Zomato Q2 Results: PAT Skyrockets 389 per cent YoY to Rs 176 Crore; Revenue Zooms 68 per cent

Board has approved a plan to raise an additional Rs 8,500 crore through a qualified institutional placement (QIP) to strengthen its balance sheet.

Food delivery giant Zomato has announced its Q2FY25 results, reporting a staggering 389 per cent year-on-year (YoY) growth in its consolidated net profit (PAT), which soared to Rs 176 crore from Rs 36 crore in Q2FY24. However, this fell short of the Street estimate, which had projected a PAT of Rs 260 crore.

Revenue from operations surged 68 per cent YoY to Rs 4,799 crore during the reporting quarter, driven by steady improvements in food delivery margins and near break-even performance in its quick commerce business.

Profit and Margins
Adjusted EBITDA saw a multifold increase, climbing to Rs 331 crore compared to Rs 41 crore in the same period last year. This surge was primarily due to the company’s focus on optimizing operations across its core segments.

The gross order value (GOV) across Zomato’s B2C businesses rose by 55 per cent YoY to Rs 17,670 crore. On a like-for-like basis—excluding the impact of the Paytm entertainment ticketing acquisition—GOV grew by 53 per cent YoY.

Food Delivery Segment
Zomato’s food delivery business reported a 21 per cent YoY increase in adjusted revenue, reaching Rs 2,340 crore. GOV for the segment also advanced by 21 per cent YoY to Rs 9,690 crore. Adjusted EBITDA for the food delivery segment jumped 137 per cent YoY to Rs 341 crore, with margins improving to 3.5 per cent from 2.6 per cent a year ago.

Quick Commerce (Blinkit)
Zomato’s quick commerce arm, Blinkit, recorded a 129 per cent YoY increase in adjusted revenue, reaching Rs 1,156 crore, while its GOV surged 122 per cent YoY to Rs 6,132 crore. However, Blinkit’s adjusted EBITDA remained negative at Rs (-8 crore). While this marked an improvement from the Rs (-124 crore) loss a year ago, the loss widened from Rs (-3 crore) in the preceding quarter.

The company acknowledged that while most Blinkit stores are profitable, overall margin expansion remains elusive due to ongoing infrastructure investments.

Dining-Out Business
Zomato’s dining-out business also performed robustly, with revenues skyrocketing by 214 per cent YoY and GOV increasing 171 per cent YoY in the July-September 2024 period.

Capital and Fundraising
Zomato's cash balance decreased by Rs 1,726 crore during the quarter, largely due to the Rs 2,014 crore outlay for the acquisition of Paytm’s entertainment ticketing business. In response, the board has approved a plan to raise an additional Rs 8,500 crore through a qualified institutional placement (QIP) to strengthen its balance sheet.

The company clarified that it has no plans for further acquisitions or minority investments in the near future, and the fundraise is aimed solely at bolstering cash reserves to navigate the competitive landscape.

Stock Performance
In today’s intraday session, Zomato hit a low of Rs 242.20, dipping 5.56 per cent, but rebounded to close at Rs 264, gaining 2.98 per cent. On a year-to-date (YTD) basis, the stock has delivered impressive returns of 112.05 per cent.

Disclaimer: The article is for informational purposes only and not investment advice.