Zomato continues to impress investors and food enthusiasts with yet another profitable quarter. This news is a breath of fresh air for the Indian food delivery giant Zomato, led by the dynamic Deepinder Goyal. We’ll dive into the details of their second-quarter performance and a special highlight of Blinkit’s remarkable turnaround.
Thank you for reading this post, don't forget to subscribe!Zomato’s Profitable Quarter in FY24
Zomato has reported a profit after tax (PAT) of Rs 36 crore from July to September 2023, marking a significant milestone in its financial journey. This impressive performance was fueled by robust growth across all key business-to-consumer segments: food delivery, quick commerce, and going out.
Strong Growth in Key Segments
The second quarter of FY24 saw remarkable growth in gross order values (GOV), with a 47% year-over-year increase in the food delivery, going out (dining out and live events), and quick commerce segments. Food delivery witnessed a 20% rise in GOV, showcasing a robust recovery from the previous two quarters.
Zomato Gold Revival
One key factor contributing to Zomato’s success in the food delivery segment is the resurgence of the Zomato Gold program. This loyalty program, offering free delivery above a minimum order value and additional discounts, now boasts 3.8 million members, accounting for nearly 40% of GOV in the food delivery business.
Future Projections
Zomato expects moderate quarter-on-quarter GOV growth, translating to about 25–30%. The company aims to focus on the growth in absolute contribution profit, especially the higher ordering frequency seen in Gold members.
Blinkit’s Impressive Performance
Zomato’s grocery delivery business, Blinkit, reported a substantial increase in revenue from operations, rising from Rs 142 crore to Rs 505 crore. Quick Commerce, which faced some challenges in the previous quarter, made a strong comeback with 29% quarter-on-quarter GOV growth.
Blinkit’s Positive Contribution Margin
Blinkit achieved a remarkable milestone by turning contribution margin positive in the July–September quarter, improving from -7.3% to 1.5%. The CEO believes that quick commerce holds a massive opportunity, potentially surpassing the food delivery business in profitability.
What Lies Ahead
Zomato is cautiously optimistic about the upcoming festive season, which may not guarantee a significant boost in the food delivery business due to factors like fasting during Navratri and the ICC Cricket World Cup. However, Blinkit anticipates high growth in the December quarter.
Conclusion
Zomato’s recent profitable quarter reaffirms its position as a major player in India’s food delivery and quick commerce. Blinkit’s impressive turnaround adds another layer of excitement to Zomato’s prospects. The company’s commitment to delivering value to its customers and shareholders continues to be a driving force in its journey towards sustained success.
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