Zomato Financial Overview

Zomato, the food delivery giant, announced its financial results for the second quarter of the fiscal year 2025 on Tuesday, showcasing remarkable growth in both net profit and revenue.

Financial Highlights

Particulars (INR Cr)

Key Financial Metrics

Net Profit: Zomato's consolidated net profit surged to ₹176 crore, marking a staggering 389% increase compared to ₹36 crore in the same quarter last year. However, this figure fell short of market expectations, which estimated the PAT at ₹260 crore.

Revenue from Operations: The company reported a 68% year-on-year increase in revenue, reaching ₹4,799 crore. This substantial growth reflects Zomato's strong market presence and increasing consumer demand.

Adjusted EBITDA: Zomato's adjusted EBITDA rose significantly to ₹331 crore, up from ₹41 crore in Q2 FY24, showcasing improved operational efficiency and profitability.

Gross Order Value (GOV): The GOV for Zomato's B2C businesses grew by 55% year-on-year, reaching ₹17,670 crore in Q2 FY25. On a like-for-like basis, excluding the impact of the acquisition of Paytm's entertainment ticketing business, the GOV growth was 53%.

Segment Performance

Food Delivery Business:

The food delivery segment reported an adjusted revenue growth of 21% year-on-year, totaling ₹2,340 crore.

The GOV for this segment also increased by 21% to ₹9,690 crore.

Adjusted EBITDA surged by 137% to ₹341 crore, with margins improving to 3.5% from 2.6% a year ago.

Quick Commerce Business (Blinkit):

Blinkit experienced remarkable growth, with adjusted revenues climbing 129% year-on-year to ₹1,156 crore and a GOV increase of 122% to ₹6,132 crore.

Despite these gains, the adjusted EBITDA remained negative at (-₹8 crore), although the losses have narrowed from (-₹124 crore) in the previous year.

Dining-Out Business:

Zomato's dining-out segment performed strongly, with revenues increasing 214% year-on-year and GOV rising by 171% for the July-September 2024 period.

Cash Position and Fundraising Plans

Zomato reported a decline in its cash balance by ₹1,726 crore compared to the previous quarter, primarily due to the ₹2,014 crore deal consideration for acquiring Paytm’s entertainment ticketing business.

In response to the competitive landscape, Zomato’s board has approved raising an additional ₹8,500 crore through a Qualified Institutional Placement (QIP). The company emphasized that while it is now generating cash compared to losses at the time of its IPO, enhancing its cash balance is crucial given the competitive environment.

Future Outlook

Zomato has indicated that there are currently no plans for minority investments or acquisitions in the near future; the funds raised are intended solely to strengthen its balance sheet. The company continues to focus on scaling its operations while maintaining a competitive edge in the food delivery and quick commerce sectors.

Conclusion

Zomato’s Q2 FY25 results highlight an impressive growth trajectory, with substantial increases in net profit and revenue. Despite missing street estimates for PAT, the company’s performance in the food delivery and dining-out segments indicates strong operational execution. The decision to raise additional funds through QIP reflects Zomato's strategic focus on bolstering its financial position in a rapidly evolving market landscape.

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